Where you see the capacitors, I just have them folded down on the outside of the brush holders, I didn't put them inside next to the shaft. Where Chuck shows them is fine, you just need to keep them out of the line of fire when you put it all back together. It's best to keep the leads as short as possible.
The caps are there to suppress the excess sparking from the brushes and do a pretty good job. As far as low speed performance is concerned, it's still an old PW AC motor, so it's not going to knock your socks off. 
