Just select it in you admin. All docs are available here: http://www.68classifieds.com/documentation/
What version of the software script are you running??? I don't know if that old template is compatible with the newer versions. I don't think that template has been sold for a few years now.
Yes, you need to ftp the complete template to the templates folder. Then select it in the administration. Just a suggestion, you may want to spend some time with the online documentation for 68 Classifieds where you will find this and a plethora of additional information, although some of which may no not apply to that old of a version of the software script.