You should have a working MATLAB installation with the Simulink package. While this book has been written using the 8.1 (R2013a) release, you aren't required to use this exact version, as there are only minor differences between one release and another; the basic workflow remains the same. But you'll need at least the 8.1 release to be able to run the provided code.

In order to develop and test S-functions, you should have a compiler supported by your MATLAB release.