there're free tools like: http://www.7-zip.org/ which unpack zip files for free. Win7 or Mac should come with basic zip support too (you can unpack the files without tools).
Please unzip the package you got from themeforest.net ONE time. You should get a folder which contains PSDs, Docs and another zip file (which is called propulsion.zip. This zip file is the right file. Go to your wordpress admin panel and navigate to Appearance > Themes. Then select the propulsion.zip file, upload & install it. You can also unpack this zip file and upload the resulting folder via ftp to wp-content/themes.
Also have a look at this tutorial video @themeforest.net: http://wiki.envato.com/buying/support-buying/solving-broken-theme-issues/