This post is based on DNN 4.0.2. To install a new language pack from a downloaded file from the DNN website you have to log in as an admin or a host.
1. Once loged in go to Host - Languages
2. On the Languages page click on the Upload Language Pack link
3. Browse to the downloaded zip file
4. Click Add
5. Click Upload New File. You should now see a log with the details of the import.
6. Click the Return link at the bottom of the log and you should now see your installed package.
Happy programming