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@ Van, Just a few helpful tips. You're using the word "open", when you should be using the word "install". The title of this thread implies that you are trying to unzip the Sweeter Home .apk file in order to edit the files inside. Make sense?
To install an .apk file that has been downloaded from a website outside the Market, the first thing you must do (as the others have suggested) is to go to Settings > Applications > check "Unknown sources".
Also, go to the Market and install ASTRO File Manager. Once installed, use that app to navigate to the .apk file on your sdcard and tap on it. It should ask you if you want to install it. That should work. If it doesn't ... report back and we'll go from there.
I downloaded the astro manager.. but honestly I don't know what you do with it or how it works? please explain . haha