Yes, you should save modded files in a Mods folder. There's one in the installation folder and I think one in the saved game folder as well.
You will either have to change the current mod directory in-game (the screen that does this may be broken for you, so check out this patcher which fixes it, if that's the case) or enter it into Prefs.ini, also located in the saved game folder.
In addition, the game looks for and creates a particular folder structure in a given mod folder (you can have more than one and switch between them) so you may need to place your modded file in one of them for it to take effect the next time you start a new game with mods enabled.
PlanetImprovements.xml (if you're including the whole file) goes in \YourModFolderHere\Data\ as does StarbaseModules.xml which contains all the starbase modules. There isn't a supplied editor for starbase modules though so you would need to do that by hand with Notepad++ or some other editing program.
Be aware that there's an arbitrary limitation on how many starbase modules the AI can use. Past a hundred modules, it will not act as though those modules exist, even if they are upgrades for other modules.