That theme at kde-look is for grub-legacy and not GRUB2. It is not compatible. Of course, you can take the elements of the theme (background, fonts, etc) and make a GRUB2 theme from it.

Have a look at this thread for a couple more themes:

Towards the end of the guide is a theme installation script which makes installing your theme quite simple. It starts on Pg 50 of the guide.

The theme format manual at is for the most parts obsolete and not maintained anymore. It's good for a quick reference of the theme elements. The properties of the theme elements have changed considerable from what's there.

You cannot have menu separation as the one shown on the theme at kde-look in the GRUB2 themes. The most you can do at this time is to specify the spacing between menu items. You might consider posting a feature request to the GRUB devs.