Can I manualy add modules in Drupal 7 just by pasting them in the modules folder? I am unable to install modules in Drupal 7. I'm working on localhost so I don't have FTP, but it seems that they made it impossible to install them otherwise.

In Drupal 6 I would of just paste a module, refresh and there it was. Here I have to specify the FTP.
If you have a single site setup:

Contrib modules go in /sites/all/modules/contrib/

Custom modules go in /sites/all/modules/custom/

Custom themes go in /sites/all/themes/

If you have a multi site setup:

contrib modules go in /sites/site_name/modules/contrib/

custom modules go in /sites/site_name/modules/custom/

custom themes go in /sites/site_name/themes/

I think some of the language in this post is dangerous, remember, do NOT put modules in the root modules directory, that is DRUPAL CORE.  Everything you code and download should go in the directories I've mentioned above.