There are two ways of theme installation:
– FTP Uploading: using FTP-client (FileZilla for example) copy a folder with unpacked theme to /wp-content/themes/ on your server.
– WordPress Uploading: go to Appearance > Add New Themes > Upload and upload zip file with the theme.
After theme has been uploaded you need to activate it. For this you go to Appearance > Themes and activate Wedding Album Premium WP Theme. Once you did it the next step it to set permissions 777 for folder /weddingalbum/extensions/timthumb to your hosting.
This video helps you, use it as an example http://www.screenr.com/XL77