Koo has some dependencies, some of them in the server side, that is, they can be in another computer in the network and some of them need to be in the client side. In the server you'll need PostgreSQL and TinyERP Server 4.2. On the client side you'll need a python distribution and PyQt 4.3, at least. You can also benefit from having dbus python bindings but they're not required. Indeed, Koo will automatically use them if it finds them.
First of all you'll need a running PostgreSQL available, though there's no need for it to be in the same machine as Koo nor TinyERP server.
To test Koo you need TinyERP server 4.2 or newer. As TinyERP is a very popular and easy to install, many distributions already provide it as a package. If your distribution doesn't offer the package or the version is too old you should download it from http://www.tinyerp.org and then unpack it into any directory. Note that the tiny server can be run in a different server from PostgreSQL and the client.
Next step is starting the server. If you use your distribution's package most probably it's automatically started each time the computer starts. Otherwise, go to the directory you unpacked it and run bin/tinyerp-server.py.
Given that Koo is programmed in python you don't need to compile it. You will see some Makefiles in the source distribution, however, but they are provided for other tasks, such as compiling the documentation or language files.