Problem installing to J 1.6.1 backend

I just downloaded the zip package and was trying to install the Hot Start zip file to the Joomla 1.6.1 backend Extension Manager - Install. I have tried this 3 times with the help of Hostgator tech support and did not get a "Successful" install message. Does this template need to be unzipped on my desktop as your "Hot Start" installation instructions indicate? According to Hostgator tech support installations are typically problem free if uploaded as a zipped pack versus uploading through an FTP utility. Any suggestions or does this only upload properly via FTP?

Hot Start package contains fresh installation of Joomla + template + Default data (menu structures, articles, images...)

You do not install via existent Joomla. You should read the manual:
demo.hotjoomlatemplates.com/index.php?template=furniture_store
(How to install -> HOT Start)