I have more information.

I did get Control-N to work, but I had to close and reopen Excel.

Now, it looks like I have to have two copies each of Book.xlt and Sheet.xlt,
one copy of both in the C:\Program Files\Microsoft Office\Office11\XLStart
and one copy of both in C:\Documents and Settings\my name\Application
Data\Microsoft\Templates.

For example, Control-N opens an xls based on the xlt in the XLStart folder
but File|New opens a box and I choose Book.xlt from the "New Workbook" pane
and it opens an xls based on the xlt in the Templates subdirectory.

Am I doing something wrong again? I guess I can keep two copies, but that is
a pain.

Is there a way to set one of these choices to look to the other. I read a
thread that Word has a set of choices but does that apply here? Someone at
work suggested I put the xlt in the subdirectory C:\Documents and
Settings\Pi\Application Data\Microsoft\Excel\XLSTART. Is that yet a third
choice?

Thanks.