the 20c thing works. what happens is the 20c coins take up the slack and pretension the springs, meaning that you loose the sloppy stroke of the fork also put some better oil in them and youll end up with some really plush forks
as to where to put them, you have to unsrew the top nut (the blue one you have screwed out) from the rod that goes all the way through, then drill some hole in the 20c (should be either 8 or 10mm hole) to fit over the the thread of the rod, screw the blue nut back on and fill with oil.
try about 2 or 3 coins to start of with, you can always go back and put a few more in or take 1 out if need be.
good luck