I tried with the template and Photoshop, but was just confused and failed to figure it out..
Graphics are not my strong point!
Crayons more your style then
Open up the template - on the right hand side you'll see some layers - you'll need to create a new layer in between the 'Background' and the 'Overlay' (use the little button at the bottom of the layers thing that looks like a square with the corner turned)
Paste your icon on to this layer and it should look all shiny.
Playing about got this... It'll need renaming though...