Don't understand the documentation for changing html output

I have been looking through the documentation and I found this page, which seemed hopeful:
http://docs.cksource.com/CKEditor_3.x/D ... Formatting

However I don't know where or how to implement changes. I don't know what file to edit... I don't know whether I need to edit the code or add to the code... I'm lost!

Here is what I am trying to do. Currently CKEditor defaults to writing html like this for paragraphs and lists:

<p>
   Text here blah blah blah after a new line then a tab that I don't want...</p>
<ul>
   <li>
      list item 1 after a new line and two tabs...</li>
   <li>
      list item 2, same thing...</li>
</ul>