Theory Overload?

It takes some time before the idea you study can be implemented in your game. Trying to use new ideas will make you make mistakes at first, but soon you will be better than ever. Keep up the hard work and you will definitely improve, pretty quickly too :). Also as far as tactics go, if you go through all the problems in this book a few times, you will be a tactical juggernaut http://www.amazon.com/Tricky-Chess-Tactics-Fred-Wilson/dp/1580420761/ref=sr_1_1?ie=UTF8&qid=1316053947&sr=8-1 .

i went through the same thing, and alot of people , have where they are learning alot but are failing to practice, at the end of the day practice will make you better

Before I got tired of playing I found this a good way to improve: Learn at least one opening system with each colour well, not memorising lines but rather the ideas behind the opening. What pawn structures that are good for you and bad for the opponent, what exchanges to make and avoid, what traps there are for both sides, what endgames that may result and if they are desirable or not, what pawns to push, what squares to target etc. Memorising a few crucial lines isn't bad either, of course, but not the main point. After a while one will find that instead of ending up in worse middlegames with no plan one much more often gets a decent middlegame position with a clear plan. Also: playing through lots of rook endgames gives a good feel for endgames. It's amazing how many points that are won or lost in fairly equal endgames, especially rook endgames.

I found this is what happened to me. I was to keen to use the different positions that I overestimated there relevance to the situation. 

I was using them for the sake of it.

I have just ordered that book. It is one I have not read.