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See this forum thread - http://chdk.setepontos.com/index.php/topic,2929.0.html
and this thread in the German CHDK forum (google chrome automatic translation recommended) : http://forum.chdk-treff.de/viewtopic.php?f=7&t=2973
Setting up a development environment on your computer is necessary when working on larger Lua scripts due to the awkwardness of testing code on the camera. (remove SD card from camera, insert into computer, save file, remove SD card, insert into camera, run code. repeat repeat repeat.)
1) install lua - http://luabinaries.luaforge.net/download.html