Note: This works for every single source engine game. It will not cause VAC bans.

I decided to post it in the L4D section because there's one infamous horrible guide by someone.
I want to replace that guide and spare you from a gruesome "i deleted all my original files" fate.

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Some old tutorials tell you to unpack all your vpk files and delete them to install the mods.
That is about the dumbest thing you can do, because it WILL cripple your game if you mess up.
You'll end up needing to reinstall the game, or get the original files from someone else, or have the original ones backed up and.... its just down right idiotic.

Learn how to do it properly, without having to delete anything.

Instead of using the python script, you can just get crowbar to pack the addons up.
Get Crowbar Here
In the "!MODS" folder, make another folder called "pak01" and put your "materials, models," and everything else in there.
Then use Crowbar's pack tab with the "Write multi-file vpk" button enabled to pack that pak01 folder into multiple vpk files. You'll get the exact same result but without installing python or a script.
This essentially removes the entire part from 2:26 to 4:14.
I will keep this note here until i get the time to edit this video swapping the old data out with new one.

If you want to use the python way, as described entirely in the video, you need:
Left 4 Dead 1 Authoring tools - From the Steam tools library (Or whatever game you're modding)
Python[www.python.org]
This python script[github.com]

I've made a video tutorial for this, so if you'd rather watch the video, here it is.
IF you prefer text, scroll past.

Before you can install mods, you need to make a "mod" folder.
You need to fool the game into thinking it got an update or DLC to "inject" your mods into the game, overwriting the original game files that way.

Here's how you make this "DLC" folder.

1. Go to "steamapps\common\left 4 dead\left4dead"
   For other games, open the folder of the same name as the .exe.
   examples:
   steamapps\common\Portal 2\portal2
   steamapps\common\Half-Life 2\hl2
   steamapps\common\Team Fortress 2\hl2
   
2. Open "Gameinfo.txt"
   
3. Scroll down to where you can see the following:
   
   
   SearchPaths { Game left4dead_dlc3 Game |gameinfo_path|. Game hl2 }
4. add a new line to the top, as such:
   
   SearchPaths { Game Mods Game left4dead_dlc3 Game |gameinfo_path|. Game hl2 }
   
   This marks the folder called "Mods" as a new content folder. allowing you to just install and uninstall mods easier.
   Note: If at any point you verify the game files, this Gameinfo will be reset to default. so you will need to do it again.
   
   
5. Copy your modified Gameinfo.txt
   
6. Go to "steamapps\common\left 4 dead"
   
7. Create a folder called "Mods" and open it.
   
8. Paste the gameinfo.txt in that folder

If you want to use Python.
Create a file called "make_pak01.py" and paste the downloaded python script into it.
its a text file. Any text editor can edit it if you right click it.
Alternatively make a text file, paste the content and change the "txt" extension to "py"
change the "VPK_PATH" part to fit your install location.

Now the folder should look like this:

If you wanna use Crowbar instead of python:

1. Inside the "Mods" folder, create a folder called Pak01.
   
2. Put all the content folders of your mods (materials, models, particles...) into "Pak01".
   
3. Open Crowbar's "Pack" tab, drop the Pak01 folder onto it and pick "Write multi-file vpk".

You'll get at least a pak01_000.vpk and a pak01_dir.vpk
If you have many files, you'll automatically end up with a pak01_001.vpk, if needed.
You are now done.

All the content you want to pack is scattered through the 000.vpk, 001,vpk... files.
If those are not deleted before packing a new vpk, the multi-chunk vpk might break.

1. Put all the content folders of your mods (materials, models, particles...) into the "Mods" folder you made.
   
2. Run the "make_pak01.py" Python script.
   A CMD window will appear. do not close it! That is the packing process. It closes itself when done.

You'll get at least a pak01_000.vpk, a pak01_dir.vpk and a vpk_list.txt.
vpk_list.txt lists all files inside the pak files. you could delete it, but ignoring it is easier.

If you have a whole awful lot of mods installed, you'll automatically end up with a pak01_001.vpk, pak01_002.vpk and more if needed.
Now your folder looks like this:


You are now done.

All the content you want to pack is scattered through the 000.vpk, 001,vpk... files.
If those are not deleted before packing a new vpk, the multi-chunk vpk breaks.
The Python script has been set up to delete all vpk files to prevent this.
Should you have any VPK files you do not want to delete, keep those in a subfolder.

If you ever download a mod packed in a pak01_dir.vpk, first tell the "modders" they're stupid.
Then:

1. Open that pak01_dir.vpk.
   it SHOULD only have a few folders. like materials and models.
   
2. Unpack those materials and models folders into your "Mods" folder.
   
3. Delete that pak01 of that mod, and all the vpk files in your "mods folder"
   
4. Run the "make_pak01.py" once again.