I've got a blog located in wordpress. I purchased a website from GoDaddy and forwared it to my wordpress blog. Now, if I wish to install any wordpress plugin to my website, I usually get instructions like - download this and put it to that particular directory. How do you discover that directory after i am using Wordpress's free bloggin service.

I am afraid you can't upload plug ins/styles to WordPress.com, even when you've got a planned domain. http://support.wordpress.com/plugins/

Host wordpress at GoDaddy - you already utilize them for domain registration - and you may use plug ins, in addition to do a lot more, as wordpress.com is restricted people. Export your overall content from .com for your own wordpress install, too.