As you probably know, or are about to learn, theme packaging has changed with the advent of Magento version 1.4. You can learn more details about those changes here: http://fishpig.co.uk/create-a-custom-theme-in-magento-1-4
The free, flexible, and very popular Telescope Theme can be downloaded and installed via Magento Connect with extension key ‘magento-community/TelescopeTheme-0.6′. Note that the beta version must be used.
Upon install completion, an error appears on the magento frontend:
Fatal error: Call to a member function toHtml() on a non-object in {your_path}/app/code/core/Mage/Core/Model/Layout.php
The fix:
The issue is with page.xml in the Telescope theme files:
Locate the file app/design/frontend/TelescopeTheme/default/layout/page.xml
Edit the file and replace the following line:
<block type="core/profiler" output="toHtml"/>
with:
<block type="core/profiler" output="toHtml" name="core_profiler"/>
Then clear your store cache via the admin or by deleting var/cache and var/session.
Activating the Telescope Theme in Magento 1.4:
Activating the newly installed Telescope Theme is also a bit different than in previous 1.3.x versions of Magento. Here is a screenshot for reference as configured under System -> Configuration -> General -> Design. Update values to those below, then refresh your cache again. The Telescope Theme should now appear on the front end without error.

Activating the Telescope Theme in Magento 1.4