If you need to learn LUA, you can refer to c00l's tutorial as you seem to be doing or mine.
If you need to get LuaC working to compile your lua scripts, you'll need to assure you have the one that is made for Bully and the correct version of lua (5.0.2)
Download HereInside that is a executable file called 'LuaC.exe'
You will also want to assure you have visual installed as the compiler requires it as it uses parts of it. The download has more detailed instructions included.
Then to use the Lua Compiler, you can do one of two things.
1) Open up command prompt/cmd.exe,
type 'LuaC' or 'luac' (it's not case sensitive) and then type in the output file name, then the input file. The output file should have the lur extension. Additionally, assure that your in the proper directory when you type in LuaC in the command prompt. The directory is wherever you put LuaC.exe on your computer. To set the directory (folder) that is being used in the command prompt, type 'CD (directory path here)' EX: CD C:/LUA
Example of the whole process:
(For this example, assume that on the root of our C Drive there is a folder called "LUA" and inside is the LuaC.exe, and a lua file called "BullyMod.lua"
CD C:/LUA
LuaC ArcRace1.lur BullyMod.lua
Then from that, ArcRace1.lur should be created in our LUA folder. This file is now a compiled script ready to be put in our scripts archive. (Scripts.img)
OR...
2) Drag & drop your LUA source file over the LuaC.exe
this will create a file called 'luac.out' you can then rename this to what you want your script to be named.
This method is significantly easier it seems...