I was totally confused too.
In all the explanation text, it never said where you were supposed to add the CSS code to support your tags. It did a great job of explaining where to put the CSS class tags (?), but never said where to add the code. I've been going crazy looking through all the folders trying to find a form master style sheet to modify.
I was getting ready to add the CSS code to my skin.css. I guess it would work there too. So, just a quick question, if you export the form, and then import it on another site, you need to also modify the other site's style sheet with the form classes, right? The export function doesn't handle the CSS export too.
On the padding note, I'm glad you left it out - I'm working with some really constrained forms (sizewise) and need all the room I can get - I'll add padding where I can.
Love the product. 
Thanks,
Joe.