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Hi,
1) Remove all the files, including those in folders.
2) Only upload all files and folders from the html folder and all subfolders to your XOOPS directory. The rest is not necessary.
I am not sure but I think you will need to set your mainfile.dist.php again and also chmod the files and folders again like you did the first time you installed version 2.0.6.
When you open your website you should automatically be guided to the installation process.
Regards,
Martijn