Hi,
Every joomla template has its own structure. What is going on with yours, i have really no idea.
But our VM Template comes with this folder:
mod_virtuemart_search
remember? you uploaded this folder to your FTP server to this path:
ROOT/templates/<yourjoomlatemplate>/html/mod_virtuemart_search/
Since it is only a folder in the templates folder, it includes only the layout, basically we have changed the regular (official) virtuemart search module's look to make it little fancy and cool. (this is actually what your joomla template is trying to do right now). So, either eliminate the functionality of your joomla template and let our VM Template to style that search box alone (which i believe you have no idea how to do it, neither do I.. i need to investigate your website to understand what's going on which isn't included to our free support)
Or simply change this folder name:
ROOT/templates/<yourjoomlatemplate>/html/mod_virtuemart_search/
to
ROOT/templates/<yourjoomlatemplate>/html/mod_virtuemart_search2/
So you will eliminate our VM Template's influence on the search module. Therefore, your joomla template will be alone to control that module. I believe this will work for you.
Regards.
Forum Support.