I have done this a couple of times on my 2002 - 8 hp Nissan 2 stroke (made by tohatsu). It really is a simple straight forward process on these motors. Here is the order that i normally take, going off of memory here so be forgiving.
1. With the motor mounted upright on a stand, remove propeller and drain oil from lower unit.
2. remove pin on lower side of the shift rod (located just before the shift rod enters the draft shaft housing). I found an extremely small screwdriver works as a good punch to get this out. You can usually find a set of these small guys in the hardware department at wal-mart.
3. remove 4 bolts holding lower unit to drive shaft housing and remove lower unit. It should just slide down and out.
4. Now you should see the plastic housing for the waterpump. Remove the 4 bolts holding it on and slide the housing up and off of the drive shaft. this is where you should start seeing the parts that came in you kit.
5. replace gaskets using an anerobic gasket dressing to make sure everything seals well (I believe the shift rod is held in place in the lower unit by a portion of the waterpump housing, I can't remember if you have to remove it. I did and it is a little tricky getting back in the right spot but not too difficult)
6. Insert new impeller in the stainless steal impeller housing. (I believe there is a small pin that acts as a key between the inner rim of the impeller and the drive shaft).
7. Slide the plastic pump housing back into place and re-install with the 4 bolts. (More gasket dressing around the underside of this, please)
8. Slide the lower unit back up into the drive shaft housing. you have three things that need to line up here. A. Drive shaft coming out of lower unit needs to properly fit back into the underside of the powerhead. B. The water tube running down the draft shaft housing need to sit in the proper spot on top of the water pump housing. C. Shift rod needs to run back through it's respective hole in the drive shaft housing.
9. With everything lined up, re-install the 4 bolts holding the lower unit on and re-insert the pin that connects the shift rod to it's upper half
10. Re-attach propeller and re-fill lower unit with oil.
If you still don't have water coming out of the motor when you run it, your problem could be a clogged water tube, or the coolant chambers around your cylinders may be clogged. If have worked through this problem as well, although it is a great deal more complex as it requires removing the power head.
Good luck,
WTA