1. First, open Photoshop. You must have version 7 or newer.
2. Load the .atn file into Photoshop so that it appears in your "Actions" tab. For a detailed tutorial on how to load actions into Photoshop please read
this.
3. You will now see ~Sweet 16 ~.atn in your "Actions" tab.
4. Now, open the .psd file into Photoshop. You should see the template with the blank windows.
5. Lastly, press "Play" to run the action and follow any instructions that pop up.
6. When the action is finished running be sure to save the result as a copy so that you do not overwrite the original. On a Windows system you would do this by choosing File-->Save As--> and then choosing a location to save on your hard drive.