To install an exported and zipped template via the Joomla administration panel in Joomla 2.5 please do the following:
1.Go to Joomla Administrator (www.yoursite.com administrator) gt Extensions gt Extension Manager
2.In the Extension Manager choose the first option Upload Package File
3.Click the Choose... button to select the zip file from your computer
4.Click the Upload amp Install button
5.Go to Extensions gt Template Manager
6.Find the template in the list and put a star next to it
7.Click the Make Default button.