This may be overkill - but here's the contents of the header.php fill WITH your suggested code in it (maybe I'm doing something wrong?)
--------------------------
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd">
<?php global $k_option, $query_string; $k_option['custom']['real_query'] = $query_string; ?>
<html xmlns="http://www.w3.org/1999/xhtml">
<head profile="http://gmpg.org/xfn/11">
<!-- basic meta tags -->
<meta http-equiv="X-UA-Compatible" content="IE=EmulateIE7" />
<meta http-equiv="Content-Type" content="<?php bloginfo('html_type'); ?>; charset=<?php bloginfo('charset'); ?>" />
<?php
if (function_exists('khelper_follow_nofollow')) khelper_follow_nofollow();
// outputs a rel=follow or nofollow tag to circumvent google duplicate content for archives
// located in framework/helper_functions/lots_of_small_helpers.php
?>
<!-- title -->
<title><?php if (is_home()) { bloginfo('name'); ?><?php } elseif (is_category() || is_page() ||is_single()) { ?> <?php } ?><?php wp_title(''); ?></title>
<!-- feeds and pingback -->
<link rel="alternate" type="application/rss+xml" title="<?php bloginfo('name'); ?> RSS2 Feed" href="<?php bloginfo('rss2_url'); ?>" />
<link rel="pingback" href="<?php bloginfo('pingback_url'); ?>" />
<!-- stylesheets -->
<link rel="stylesheet" href="<?php echo bloginfo('template_url'); ?>/js/prettyPhoto/css/prettyPhoto.css" type="text/css" media="screen"/>
<link rel="stylesheet" href="<?php bloginfo('stylesheet_url'); ?>" type="text/css" media="screen" />
<?php $skin = $k_option['general']['skin'] != '' ? $k_option['general']['skin'] : 1; ?>
<link rel="stylesheet" href="<?php echo bloginfo('template_url'); ?>/css/style<?php echo $skin; ?>.css" type="text/css" media="screen"/>
<!-- scripts -->
<!-- Internet Explorer 6 PNG Transparency Fix for all elements with class 'ie6fix' -->
<!--[if IE 6]>
<script type='text/javascript' src='<?php echo get_bloginfo('template_url'); ?>/js/dd_belated_png.js'></script>
<script>DD_belatedPNG.fix('.ie6fix');</script>
<style>#footer ul li a, .sidebar ul li a {zoom:1;} #head #searchform, #head #searchform div {position:static;}
</style>
<![endif]-->
<?php
######################################################################
# PHP scripts
######################################################################
// single post comment reply script by wordpress
if ( is_singular() ) wp_enqueue_script( 'comment-reply' );
//wp-head hook, needed for plugins, do not delte
wp_head();
?>
<!-- meta tags, needed for javascript -->
<meta name="autorotate" content="<?php echo $k_option['mainpage']['slide_autorotate'];?>" />
<meta name="autorotateDelay" content="<?php echo $k_option['mainpage']['slide_duration']; ?>" />
<meta name="autorotateSpeed" content="<?php echo $k_option['mainpage']['slide_transition']; ?>" />
<meta name="temp_url" content="<?php echo get_bloginfo('template_url'); ?>" />
</head>
<?php
######################################################################
# check for custom logo
######################################################################
if (isset($k_option['general']['logo']) && $k_option['general']['logo'] != '')
{
$logo = '<img src="'.$k_option['general']['logo'] .'" alt="'.get_settings('home').'" />';
$logoclass = '';
}
else // default logo
{
$logo = get_bloginfo('name');
$logoclass = 'logobg';
}
######################################################################
# check which page and apply classes to body
######################################################################
$k_body_class ='';
if (isset($k_option['custom']['bodyclass'])) $k_body_class = $k_option['custom']['bodyclass'];
?>
<body id='top' <?php body_class($k_body_class);?> >
<div id='headwrap'>
<!-- ###################################################################### -->
<div id="head">
<!-- ###################################################################### -->
<a href="http://stubstory.com/send-us-your-stubstory/"><img alt="" src="http://stubstory.com/wp-content/uploads/2011/05/ss_uploadbutton2.jpg" /></a>
<h2 class="logo ie6fix <?php echo $logoclass; ?>"><a>/"><?php echo $logo; ?></a></h2>
<div class="nav_wrapper">
<!-- Navigation for Pages starts here -->
<?php
wp_nav_menu( array( 'menu' => 'First', 'menu_class' => 'nav', 'echo' => true,
'fallback_cb' => '', 'before' => '', 'after' => '', 'link_before' => '', 'link_after' => '',
'depth' => 0, 'context' => 'frontend'));
/* pre wp 3
if(is_object($k_option['custom']['kriesi_menu_pages']))
$k_option['custom']['kriesi_menu_pages']->display('Menu Manager Pages','show_basic');
*/
?>
</div><!-- end nav_wrapper -->
<div class="catnav_wrapper">
<!-- Navigation for Categories starts here -->
<?php
wp_nav_menu( array( 'menu' => 'Second', 'menu_class' => 'catnav', 'echo' => true,
'fallback_cb' => '', 'before' => '', 'after' => '', 'link_before' => '', 'link_after' => '',
'depth' => 0, 'context' => 'frontend', 'walker' => new description_walker() ));
/* pre wp 3
if(is_object($k_option['custom']['kriesi_menu_cats']))
$k_option['custom']['kriesi_menu_cats']->display('Menu Manager Categories','show_main_description');
*/
?>
<!-- end catnav_wrapper: -->
</div>
<div id="headextras" class='rounded'>
<?php get_search_form(); ?>
<ul class="social_bookmarks">
<?php if(isset($k_option['general']['contact_link']) && $k_option['general']['contact_link'] != '')
{
$contact_link = get_page_link($k_option['general']['contact_link']);
echo "<li class='email'><a href='".$contact_link."'>E-mail</a> ";
}
?>
<li class='rss'><a>">RSS</a>
<?php if(isset($k_option['general']['acc_tw']) && $k_option['general']['acc_tw'] != '')
echo "<li class='twitter'><a>Twitter</a>";
?>
<!-- there is room for 3 icons, below are predefined classes for others if you want to use them instead -->
<!--
<li class='flickr'><a href="#">flickr</a>
<li class='facebook'><a href="#">Facebook</a>
-->
<!-- end social_bookmarks-->
<!-- end headextras: -->
</div>
<?php
// submit news button
if($k_option['contact']['membernews'] != 2) {
if(($k_option['contact']['membernews_who'] != 2 && current_user_can('level_0')) || $k_option['contact']['membernews_who'] == 2)
{
?>
<a rel="prettyPhoto">/submit_news.php?iframe=true&width=420&height=580"><?php _e($k_option['contact']['submit_news_text'],'newscast'); ?></a>
<?php
}
} ?>
<!-- ###################################################################### -->
</div><!-- end head -->
<!-- ###################################################################### -->
<!-- ###################################################################### -->
</div><!-- end headwrap -->
<!-- ###################################################################### -->
<!-- ###################################################################### -->
<div id="contentwrap">
<!-- ###################################################################### -->
Create a new thread and tell me what problems you are encountering and what you want to know. 
There is no step 3 :) 
