I'm not familiar witht the instructions of the 1.2 patch. It will find your MM9 installation regardless of where you placed it. If not, what they would be looking for is the folder which contains a file called 'mm9.exe'. It should turn up if you do a search of 'My Computer'.BTW, that is the folder you would need if you really meant TELP's 1.3 patch. Place the 1.3 patching program there and run it.
However, don't install any patch if your game is hanging. That's an unrelated problem and you should clean that up first. Am I correct in understanding that your computer locks up when you exit MM9? This sounds like it might be a compatibility problem. Have you done anything with that?