I placed the module in Mod folder. When i am logging in as Admin a line is appearing at the top
It says
Module "Block_attendance" is not readable - check permissions
I know im doing something wrong. Please help me
no one can help me 
My guess is that either the attendance module is not ready for your version of Moodle, or as it says in the message, that php (i.e. moodle) does not have permission even to read the attendance block folder or files. You may be in luck and just able to change the permissions, but I suspect the former.
Version 1.7 currently not support... Work started. 
I would say that one part of it should go to blocks (attendance) and the other part to mod (attforblock). If you have put the unzipped contents to wrong directories, moodle will complain with the error you have given. Please, re-read the installation instructions of the package.
This has happened to me before and in general it has been the unzipping operation that has caused the problem. Unzipping with Windows XP zip sometimes creates a sub-folder. So when you upload the mod what you are in fact uploading is the 'block_attendance' folder with a 'block_attendance' sub folder. check you the contents of your 'block_attendance' folder in the mod directory.
ian