First, remove your previous installation, then extract the new fpc-archive.

Then I have this in user-startup:

;BEGIN FreePascal
Assign FPC: WORK2:fpc_20140222_r26832
Path FPC:bin/powerpc-morphos ADD
;END FreePascal

You certainly have to modify the path in the Assign statement.

Then copy this to the shell and enter:

SetEnv SAVE PPC_CONFIG_PATH FPC:bin/powerpc-morphos/