The theme comes with 2 menu areas: Main Menu and Footer Menu.
To add pages to your menu go to Pages › Add new page, choose the name of your page, for example, "About", fill some content and click on publish. Now go to Appearance › Menus.
To create a menu, enter the name(in the following screenshot I named it Main Menu) and click on Create Menu. After you created the menu, save its location to Main Menu by clicking on save. Important note here it's that the demo xml will generate the theme menu but you will have to manually save the menu to the correct location.
The left column allows you to choose the type of link you want to add to your menu.
Select the check boxes next to the pages you want and click add to your menu. Add a few custom links if you need. An example of custom link would be the homepage: insert the link to your site homepage in the URL input, label it Homepage or Index or how you like and add it to menu.
Now click and drag the items in the right column – you will notice that you can arrange them and adjust them left and right. The order you arrange them in is the order in which they appear. The adjustments you make left and right determine their hierarchy in the site. The leftmost items are your primary navigation. Items nested one notch to the right are the secondary navigation of their parent, and so on.
The primary navigation items appear at all times at the top of the page, and when you mouse over them the secondary navigation menus appear. The third tier menus and so on appear to the right of their parent items when the parent is moused over.