the theme has to be an OTS or OTS2 Theme. Open the zip and take a look if there is a Theme folder (name of the theme) inside. if there is an *.lsz, extract the file and doubleclick it. It will install itself (only OTS2 themes can have the extention lsz). If it doesn't install itself do it like you would do with a zip file.
Open your popup -> Litestep -> Utilities -> Litestep Theme Installer: now enter the zip file and install. Litestep will recycle itself with the new theme.
!!! a popup will open with a switching-back question, don't close it until you know that your new Theme will run perfect (all images can be seen), so there's no problem with switching back to a working theme!!!