The absolute path is where your SMF forum is installed so to give you an example mine is in a directory called smf and the absolut path is

/home/mysite/public_html/smf

So you would need to replace mysite with whatever your domain is and finish with the directory of your SMF install. So let's say your domain is www.joes.com and your forum is in the directory forum so the url would be www.joes.com/forum and the absolute path would be

/home/joes/public_html/forum

As to the patch I have run into that as well. You will need to change the permission on the directory
smf/sources to 777 and the files
smf/sources/Subs-Post.php to 777 and
smf/index.php to 777

go back and repatch and it should work

First of all....you say that you got Joomla 1.06.
You have to upgrade immediately to Joomla 1.07...there's a serious bug in 1.06 that could make your site stop working all together....

Second...
To patch the mambo/joomla index.php you have to make sure that the index.php is writable as well as the folder that it is in...
So let's say that the index.php is in the folder "httpdocs"...then make sure that this folder is writable too.

If all this is correct then just click the patch link in the Joomla-SMF component.