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Presumably you have downloaded the correct version of the theme via your customer dashboard on the AppThemes homepage Account Login. Via ftp, you can rename the old classipress theme folder to...

Did you replace all files? Maybe you would need to flush the classipress cache (classipress settings => system info)

Looks fine in IE8. In compatibility mode the navbar breaks the line. So you would need to adjust the widths in this region for ie7 with a conditional style sheet.