You can, but the limit on the native game applies to the mods. Or that's how it was when I did it, back with .751.
Ok, assuming you have winrar installed:
1. Open the mod file.
2. Extract it by clicking 'extract' in winrar.
3. Go to where you extracted it and copy the folder that says Britain 1297.
4. Go to your Mount&Blade modules folder (C:\Program Files\Mount&Blade\Modules by default)
5. Paste the folder into there.
6. Run Mount&Blade. Click where it says 'Native' and a drop down box should appear, select Britain 1297 from the list.
7. Play Mount&Blade.
Can't make it any clearer than that.
Also, buy the bloody game, best 20 quid's worth of game you'll play.