When I try to install it is looking for a package of files (CSS, JS, etc). Since this is only a singel XML file it seems like it doesn't work. The theme creator did provide these instructions but they seem to maybe be for wordpress.com sites rather than self hosted?
Step 3 - Upload the XML File
From the Dashboard
Under 'More Options' select Template
In the top right click 'Backup/Restore'
Where it says 'Upload a template from a file on your hard drive' - - Then click 'Upload'
