Hi, I would like to design the store before getting it up on the server. I don't have an official domainname set yet and will ask for it once I get forward with the shop.
Can I put the downloads in my xampp and work on the localserver, before connecting or do you have to got thru an ftp first?

Yes you can but do a search here on EasyPHP and you'll see that xamp and joomla and other server simulators are harder to use.

how do I install this with xampp?

Why do you need to specifically use Xamp?

You've just been told that EasyPHP is better to use.