If you get the error message cannot find XML setup file when you try and install the template for Joomla and Virtuemart you need to unzip the template zip package first you have downloaded from the website onto your computer.
Once you have unzipped the file you will find a installation guide inside the zip file which includes instructions to guide you through setting up and installing the template.
The reason why the error cannot find not find XML setup file appears is because Joomla can not find the TemplateDetails.xml file because you have not unzipped the package first.
Also read the template zip package format article which will provide you with more information about the structure of the zip file.