In this template package include a folder named Joomla2.5 and it is right for you. It is not important if some extensions say 1.7 because it can be used for both.
If you use the demo package, you will have a full site as our demo (we recommend this if your not sure.) demo.omegatheme.com/joomla25/mega_orthodontis.html
See demo installation guide here
If you just install the template package, you need install included modules. The lide module is mod_megafeaturedarticleshow_j25.zip.
This module get articles from a category to slideshow. So you need create a category, create some articles put into that category. The articles must contain images.
In module parameter configuration, you need to choose that category as content source.