Hi,
Most likely you are missing something in the installation.
Where did you install the /com_virtumart/ that comes out from the ZIP installation file? Are you sure you did things exactly how they are explained the TUTORIAL.PDF? and how about "category page".. is everything alright with the category page?
If everything is correctly installed, then all i can say: this kind of things might happen in local machine, because usually those local host (xammp) are using very new PHP version or very low PHP version (usually low) OR some PHP plugins are disabled by default and you should activate them manually. What do you see in the logs about that internal server error "logs/error_log"? Have you ever tried to install it to any live server? If so, provide me the FTP credentials and joomla admin account and let me do the installation for you from scratch.
Regards.
Forum Support.