I am not from Laminar Research; just a flight simmer from down under.
My comments are based on the fact you are planning to run the official, genuine and original version of X-Plane developed by Laminar Research and not the 3rd party hybrid modified version called steam.
Steam is not the same product and installs differently to the LR version.
The downloaded demo version is exactly the same as the full version. It runs and installs in the same manner. The only difference being you have not purchased a product or activation key.
My suggestion is to download the full version. During the "boot-up" you will be asked if you have discs. Reply no. Then you will be asked if you have a product key. Answer no. You will be advised that the software will default to the demo mode. Answer "I understand". The software will then start in demo mode.
The demo mode has a time limitation of 10 minutes and you are restricted to a single airport in the USA and there may be a possibility of no scenery selection. Just water.
How to install? Quite simple. During the installation process, as you have found, and provided it is a LR version, you will be given the selected (default) location. Beside the location box their should be a browse tab or button. Hit the browse button and chose or nominate your required location.
Whatever you do, make sure you do not select the installation to be within another directory. It will not work. It has to be a clean directory eg E:\X-plane\ ..... where drive "E" is your installation or drive choice.
Other issues to consider. You can run the demo as many times as you chose. When you decide to purchase the software you will be supplied with the product key. Apply the lengthy key number when asked and X-Plane should open up into its full glory.
Once you have applied the product key the digital version has to be connected to the internet at all times as the software performs a silent background check to confirm you have a legal version. If not it will lock you out immediately or at an inconvenient time.
You can install the software on any number of computers but you can only run one copy at a time. If you are running more than one copy it will detect the same product key and you will most likely be permanently locked out for all copies.
Hope this helps.