What is "theme"?

In the case of the iPhone, a theme consists largely of the way the SpringBoard (desktop), dock and all the program icons look.
A theme usually change all the default applications icons, the background/wallpaper,
the dock and some other elements of iPhone Graphic User Interace.

You can change the iPhone's appearance with a theme and the support of 2 utilities.
You will need 'Cydia' (it is included in jailbroken iPhones by default) to download 'WinterBoard' and the PC utility 'iFunBox'.

View and read more about Themes here: Tutorial with Pictures

How To: Manually install iPhone themes

Connect the iPhone to your PC with the USB cable.
Download to your PC the freeware utility iFunBox from here: iFunBox
Run iFunBox (no installation is needed)
Drag & drop the Theme (folder) to "Raw File System/Library/Themes" see this picture to understand better.
Launch *Winterboard and apply the new theme... done!
*Your iPhone should be Jailbroken, use Cydia to find and install the excellent freeware utility Winterboard.

Refresh the look of your iPhone!