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Er... No. It's an patch file - meaning you need to use it with the patch command (see patch --help).
This patch file requires the source code of xterm for that one file it attempts to patch. This means you need to get the source code of xterm, apply the patch to charproc.c and compile and install xterm manually to use this fix.
Not to leave you completely in the dark, you can attempt to do the following also from the above guide: http://www.davidsimmons.com/soft/xtermhacks/#copynpastenopatch
Note two things though. By default SliTaz doesn't have an .Xresources file, so use .Xdefaults instead. Also .Xdefaults is a hidden file, so make sure pcmanfm is showing hidden files to see and edit it. You may have to logout and back in before the change has any effect though.
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I see you are new in this, so we better try to clarificate it.
The source code is the receipt that the developers (and some users) use to make packages (although it can be used to install the software without packages). It is usually presented in .tar.gz or .tar.bz2 files.
The idea of the pacth file is that you can use it to modify the original source code so it has a new feature, and then make package with it or install it.
If you are starting in GNU/Linux, you should consider installing another terminal emulator that has the capabilitie xterm does not. I don't know if there is one in Slitaz repositories, but you should be able to get a Debian, RPM or Slackware package and convert it to .tazpkg if needed.
Or you can just learn how to pacth source code :-)
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I agree - just install another terminal emulator. It's less hassle than recompiling xterm. I personally recommend sakura (which is in the repositories) 
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