The theme file has spaces in the name. I edited the file name, .xml name, and the description inside the .xml to be Theme_Fix.zip and included it below. Thats the only change I made and it worked like a charm, even though I had already edited it in the ROM itself, I tested this renamed file in Metamorph and it worked like a charm.
Edit: I also added the blue progress bar .xml. If you don't want to change the progress bar color, unzip the file, navigate to framework-res/res/ and delete the "drawable" folder. Then move the folder to your Android Themes folder, on your SD Card, and use Metamorph to install.
Also on a side note: One thing that did freak me out was the build.prop. I flashed the Rom, then the theme. When I flashed the theme and went into about phone, I noticed the "About Phone" model number read "Droid 2" as well as the Build number was reading "FRF98". I thought I downloaded the wrong file until I dug into the files a little deeper and started doing a little investigating. I've come to the conclusion that its just a typo. I edited it back to "Droid" and "FRG22D" and no problems. Hope this will help ease someone who comes across it and freaks out like me. LOL. At least it helped wake me up.