I'm using 2.61 and I got a material from the blender materials open material repository and appended the file to my blend file. But the material doesn't show up in the material list for objects. How do I apply the material blend file to my objects?

It wont appear in the object, it will appear in the materials folder.
File> Append> Your file > Materials - is where the materials are stored. They are stored separately to objects.

Make sure that you append the material not the image.

The material should appear int he materials list if it has been appended correctly.

Thanks, I finally figured out that you have to click on the little material icon below the applied materials list to see the available materials. I was confused and looking for it in the applied materials list on top.