Fist, you really DON'T need the starter kit. Simply use the Install version to create a working website. You'll then be able to open it with Visual Web Developer or the Express Version. I'd recommend that you use that as the basis for your development.
Next, fire up the website (you don't even need to do this with VWD either), and install the module. If your source version arrived as an installable private assembly, all of the source code should have been put in the right place.
If the source is separate, you'll have to put the various components into the correct directories by hand.
Then you should be able to open the website within VWD and go from there.
Before you get started, though, I think that it's a really good idea to get familiar first with DotNetNuke modules and module development. Michael Washington's adefwebserver.com site is a really good one. There are also some good notes from Mitchel Sellers (www.mitchelsellers.com) on developing modules as Web Application Projects (WAP). I'd recommend that you check out his site, too. And, I hope that you have a copy of the DotNetNuke Module Developer's Guide, available from DotNetNuke.com.
Finally, a nice introduction to modifying an existing module is available right here:
How to improve a DotNetNuke module (The Blog module)