OK, I have found out the first part . here goes.
Right click, anywhere on the desktop. From the pop up menu, choose Create New --> Link to Device --> Floppy Device...
Click the "Device" tab, then the "down arrow" next to the box, and select "/dev/fd0 (/mnt/floppy)". Click OK.
You should now have a floppy icon on your desktop.
"ALWAYS unmount the floppy drive, and wait until the light stops blinking, before ejecting the floppy.
Right click on the floppy icon to mount/unmount.
To test I put a floppy in with some old bookmarks on it--> clicked on it and it opens up.. read the contents ok.
Now to find out how to transfer these files in my first post.