I have the following error: simplexml_load_file(): I/O warning : failed to load external entity "/home/........../public_html/plugins/system/parameters.xml
One more thing to ask - initially what was the installation procedure - quickstart or normal joomla+template?
With update to 3.2 - you did it with joomla build in mechanism or any other way? How did you update template - by uploading new one with extension manager or by replacing the files via ftp?