Help install theme

Hi guys. Im pretty noob to wordpress. have allready created to pages, but only simple static one-colum ones.

im creating a new blogging site, and stumpled upon this theme:

http://sixx.se/wordpress-microblog-theme/

However im having issues with even understanding the few setup steps. Please help me through this.

1. Unpack and upload to your server. Enable the theme
done
2. Activate all plugins included in the theme
there is no new plugins in the plugin section? where should i find these?
3. Create a page from the template Tag and give it the slug “tag-archive”
dont even understand that? the only theme options available is menus and header (for uploading logo)
4. Make sure that “author bio” and “url” are mandatory in the Register Plus plugin settings, since these fields are used in the author page.
?????
5. Update the permalink structure.
how and why?

help is so much appreciated