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I downloaded WSUSOU and was told that it is self-explanatory. Well, my download failed to explain anything. It opened a command window and began downloading updates but I had not directed it where to save the downloads. After a few minutes, I stopped it because I sure did not want several GB of update downloads on my C: drive.

How do I choose where the updates will be downloaded?

There is no special installation for WSUSOU.
Just unpack the file wsusoffline86.zip (with preserving the folder structure) to the place where you want to go the downloaded updates (they will be stored within the subdirectory .\client).