It's a mod, you use it in a mod folder.
For example, the cultural starbase mod ZIP file has its new starbase designs in Drengins-Mods2/Data/ShipCfg. So if you throw that in the game's mod folder, you would want to be pointing at the GalCiv2/Mods/Drengins-Mods2/ folder.
The reason it doesn't work if you overwrite the base game designs is because Dark Avatar has new starbase designs, so Twilight uses those instead (I guess). The game will always use stuff from the mod folder if you're using mods, however.
