Unable to recreate blog page.

1) I did an import of the Aqua demo data but failed to recreate this page.

http://blueowlcreative.com/wp/aqua/blog/

This page shows up blank. http://test.smartjewelryshopper.com/blog/

How do I get the blog posts to show up on a particular page. For example, onto this page http://test.smartjewelryshopper.com/this-is-test-page-b/.

2) How should I go about upgrading 1.2 to 1.3?

When I downloaded the zip file from themeforest and upload the zip file, i still see a version 1.2 in the theme section of wordpress dashboard.