I got it to work!
I just deleted the subfolder like I did with RUB, and presto, it works. The mod is wonderful, the water looks so much more realistic, as does everything else. I love the Harbor Traffic mod that comes included (although i collided with a German destroyer on my first patrol

).
Do you know of any other good mods that would be worthwhile?
Also, is it normal for a Type IX boat out of 10th Flotilla to be assigned really long range patrols such as New York area and Cape Town area? Is that normal for SH3? Before i downloaded the patch and mods, I got patrols off Northern Africa and stuff like that.