The Apperance.xml file is found in the install folder for Universe Sandbox.
(in Program Files\Universe Sandbox\Data - not in (My) Documents\Universe Sandbox)
Note that when you upgrade (when the new version is released) any changes to the files in the Data folder will be overwritten without asking you. (so if you make any important changes make a backup copy outside of the installed folder)
You may also want to scale the texture down to something more manageable like 1024x512 or even 512x256.