docs: Add detailed Python environment setup instructions

system_monitor_overlay/README.md

@@ -6,9 +6,41 @@ This overlay displays real-time system information like CPU and memory usage. It
 
 ![Example Output](obs_example.png)
 
+## Setting up the Python Environment
+
+Before you can run the server, it's recommended to create a virtual environment to keep the dependencies for this project isolated from your system's Python installation.
+
+1.  **Create a virtual environment:**
+
+    ```bash
+    python3 -m venv venv
+    ```
+
+2.  **Activate the virtual environment:**
+
+    *   On Linux/macOS (bash/zsh):
+
+        ```bash
+        source venv/bin/activate
+        ```
+
+    *   On Linux/macOS (fish):
+
+        ```bash
+        source venv/bin/activate.fish
+        ```
+
+    *   On Windows:
+
+        ```bash
+        .\venv\Scripts\activate
+        ```
+
+    You will know the virtual environment is active when you see `(venv)` at the beginning of your command prompt.
+
 ## Installation
 
-To use this overlay, you need to run a small Python server on your computer to provide the system stats to the overlay.
+Once you have activated the virtual environment, you can install the required library and run the server.
 
 1.  **Install the required library:**