Blog Setup for Premium Themes

I managed to get the POST showing on my premium theme which uses a static homepage.
My problem now is that I’m having difficulty setting up the actual blog.
It looks like I can only use one category because if I add another category and select it, the post doesn’t show.
My site is HERE
As you can see on the menu, there is an option for BLOG.
If you select it, the page shows the POST but having trouble with categories as you can see in the right hand widget at the top and there is no summary of the POST which I would like instead of showing the whole article.
Are there any step by step instructions on setting up the blog feature in WordPress?
If so can someone either give me the details or give a link to a manual I can follow easily.

Thanks