Sk, that blog you have set up on 1and1, you're not going to be able to change themes or anything like that as it's all set automatically up by 1and1. The only way you're going to be able to customise it fully with your own themes/templates is to install WordPress on your own webspace.
Sorry, I didn't understand what you were talking about first of all because the UK version of 1and1 doesn't seem to have this blog feature, and obviously as I'm in Edinburgh I use the British set-up.
Anyway. You're lucky if you can use the US version of 1and1 because you get SQL databases even in the most basic package. We get screwed over here as we have to pay more for that, but hey, that's life in the UK - everything is more expensive here ;-)
You'll then need your FTP login and username, which you'll find in the 1and1 control panel. And get yourself an FTP program (I like FileZilla, personally) so you can hook into the server space you're renting.
If you go to http://www.wordpress.org you'll find full details on how to proceed there.