Normally, the launcher stores its files in your Documents or home folder (depending on your type of computer), but you can make the launcher save its files in the same folder as the launcher download. Enabling portable mode lets you place the launcher on a USB drive and carry around the game.
To use portable mode, make a new text file called portable.txt and place it in the same folder as the launcher. When you run the launcher, you should see files and folders like "instances" appear in the same folder.
SKCraft