Modding the core files wont take effect unless you delete the data.zip file in the /data folder. From what i hear, personally i avoid modding core files and just use new files in the mod folder

For Windows Vista: *Windowsfolder*\Users\*Your Username*\Documents\My Games\Elemental

for XP its "My Documents\My Games\Elemental\" Ive been putting my stuff into the Items folder.

Right now The game doesnt seem to allow seperate Mod folders, need to use the ones there already.

did you start a new game, and have the game option "use mods" enabled?

I don't quite know what you want to do, but I suggest recreating the tech tree as a custom one, instead of changing it.  Unless you need to change it, I suggest renaming the copy of the file, and maybe try putting it in these folders (one at a time until you find one that works, assuming that changing the files name does not make it work): Races, RaceTypes, Units and Tiles.