Well, one more day and one more error.
A theme with the name "THEMENAME 1011" and version already exists on the server.
Awesome.
I'm making sure that I rename the folder, inf file, spthemes.xml and I see the changes I make reflected after an iisreset. I've also made sure that the "codebase=" line in the inf file is unique. Still no joy.
I'm not sure it helps that we, in our incredible wisdom, set up SP in a distributed fashion, with one app server and two WFEs. Now I'm never sure what is updated and what isn't. I usually run iisreset on both WFEs just to feel a little better.
Guess I won't use themes, then.
look here it helped me
http://dirkvandenberghe.com/archive/2008/09/11/error-applying-site-theme-a-theme-with-the-name-quot-citrus-1011-quot-and-version-already-exists-on-the-server.aspx?CommentPosted=true#commentmessage