To use mods, you will indeed need to buy the PC version of the game. Most would probably recommend the Steam version for simplicity.
Most of the mods for the games are available either here or at a website called NexusMods ( http://www.nexusmods.com/kotor/? ), but a lot of the older ones would need to be requested in the Mod Requests section of the forums.
As for installing and using the mods, it's a bit circumstantial. At a rough estimate, I'd say 92-95% of mods come with an installer designed by the community for compatibility and patching and the other 5-8% is copying and pasting files to specific spots on your computer so the game recognizes the files. Similarly, 98% of mods come with a read-me and of those, the majority detail how to install them. If you need help, feel free to ask.
And activating the mods in-game? Depends on the mod. Some stuff might need to be done to make a mod activate, some mods might activate through normal gameplay, and some mods might just be running in the background so-to-speak.