You might be making things hard on yourself

Try this:
Leave the theme zipped. In the admin area for Joomla 1.5 goto extensions>install/uninstall.
Click browse and find the zipped theme on your computer, select it and then click install/uninstall. That should do it.
If you've already tried that or it does not work, goto Extension>Template Manger. You should see the templates you uploaded listed there. Click the radio button next to the one you want to use and then click the Default button with the big star.
If none of that works, try going to Help>System Info>Directory Permissions and make sure that everything listed is Writable.