yes, you have to point falche to your fallout directory and not your saves directory.

I've done that, but then i click open and nothing happens.

how far in are you on the game? I've found that with fallout 2, unless I've initiated combat, it doesn't work.

I don't know about any existing trainers/cheat tools, but I'm working on my own trainer for GOG's Fallout. So far I have infinite AP (for most actions), infinite ammo, and invulnerability. I can't attach it here, but I will post it on my website sometime this weekend and link it, once I've worked out some more bugs (sometimes you lose AP and can't get it back if you check a body's inventory during combat, ammo crashes game if you eject the clip, invulnerability prevents gaining HP at level up, etc)
edit: oh, and have you applied patches? I'm running unpatched and I imagine any trainers I generate will only work against that.

I'm using both patched and unpatched with Falche on Fallout 1 and they work fine...