Download, open the DMG, then double click to install (requires OSX 10.4 or better). It should select itself as your current screensaver, and also put an icon for the application on the desktop. If not, open the System Preferences / Desktop & Screensaver and choose "Electric Sheep" from the list on the left (not "ElectricSheep" without a space, because that's the old version).
Recent versions have a bug where if you run the app before the screensaver starts, it fails. This should be fixed in the upcoming v2.7b34 but until then you can use one of these workarounds:
- Set the content folder manually to the "~/Library/Application Support/ElectricSheep" folder. There is only a pain on 10.7 where the ~/Library folder is not visible by default in Finder so regular users can not select it easily.
- Or remove the "~/Library/Application Support/ElectricSheep" folder manually (again problem with invisible Library on 10.7) then run screen saver at least once.
If you have trouble, see the help page.