I think I have found the problem. The plugin is for version 1.3.1 and I had just updated to 3.5.1 immediately prior to trying to add the plugin.
So I have a new problem. How to install on the latest update?
Instead of ‘WP online’ the above post should read ‘WP online store’
Started with ‘Plugins’ from sidebar menu, then ‘add new’, then go to ‘Search’ and then type in ‘WP online’ and click ‘search plugins’. Next page then has ‘unpacking the package’.
I had typed in ‘WP online’ so many times it was coming up as a suggested option, hence I said ‘selected WP online from the menu’. Sorry for that.