If you are on linux, you will probably need to install wine.
Now, we need to edit one of MCP's scripts that was broken sometime during the seven years since these versions were created. Open runtime/decompile.py and comment out line 503 by adding a "#" to the start. It should look like this:
# commands.checkupdates()
Now we add the minecraft.jar and associated files. We need to end up with the following structure:
jars/
└── bin
├── jinput.jar
├── lwjgl.jar
├── lwjgl_util.jar
├── minecraft.jar
├── natives
└── server.properties
Note that natives/ MUST contain the correct natives for your OS.
At this point you can add mods to the minecraft.jar, they should decompile fine (though MCP will complain about a modified jar being used). Since the rest of these tutorials will use Modloader, and you should use Modloader, now is a good time to install Modloader.
Do it!
MCP should be setup now. We will test this by decompiling, recompiling, and running Minecraft.
Run decompile to decompile the game. This will take a little while, but if all goes well you will end up with a directory "src" containing the game's source code! You will probably get an error about failed hunks in RenderBlocks, this can be ignored.
Test recompilation by running recompile followed by reobfuscate. Recompile will recompile the source files into java bytecode, while reobfuscate will change all the symbol names back to the way they are in an unmodified jar. You need to do this if you want to distribute your changes.
At this point, you can assume you have a functional MCP instance, and can start developing! yay!
We'll run through the rest of the scripts briefly now, as some of them are useful (and others dangerous!)
Cleanup will reset the working directory back to an empty state, taking your work with it! Be careful with it! Backup your work!
Startclient will launch Minecraft (specifically the result of the last recompile). This is useful for testing, as you don't need to package and install your mods into another client.
Startserver will run the server, which we didn't set up because I do not know where to find a vanilla beta 1.7.3 server jar. If you know where to find one, let me know! Until that happens, this script will do nothing of use.
Updatemcp will not work and will probably break your install. You might want to delete it, just to be safe.
Similarly, updatenames and updatemd5 will probably break your install. These ones probably will work, but I don't know what exactly they do, other than update something related to the obfuscation mappings.