I downloaded CD Art Display, then downloaded this skin for it. I put the skin in the application folder and started the program. CD Art Display starts with what I think is the default skin, which simply shows the cover art for the currently playing track in iTunes. When I try to switch to the other skin I installed, it doesn't seem to do anything. The program disappears for a second and then comes back, still just displaying the default skin... Am I missing something here?

here is a video showing what it does.

I'm by no means an expert, but I'm guessing you haven't upgraded to the lasted version of cd art display. To do this, you need to download cd art display 2, install it, then download the newest beta, and copy those files over your install. Delete the default folder in the skins folder and language folder first. Sorry, the official website is not working for me right now so I can't paste the link to better written instructions than mine.