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Don is as to where the template folder is located in Word 2007. He created a template and added it to what he thought was the template folder, but the template doesn't show up in the New Document templates.
If you want to see what Word considers the location, then follow these steps:
In the File Locations dialog box you can see the folders in which Word presumes you store both user templates and workgroup templates.
You should know, however, that just because Word knows this is where your templates are to be stored (in the User Templates specification), that doesn't mean that it stores new templates there by default. The reason for this is security; the templates folder is trusted, meaning that any macro stored there is trusted by Word. To avoid the chance of placing an unwanted macro into a trusted location, Word 2007 doesn't store templates, by default, in the templates folder.
Fortunately, the template folder is now a default "place" in the hierarchy shown at the left side of the Save As dialog box. Click Templates in the hierarchy and the file will be saved in the proper templates location (the same one you saw in the File Locations dialog box). When you later want to create a new document based on the template, in the New Document dialog box you can select My Templates at the left side of the dialog box and see the templates that you've saved.