I delete the template folder in SSMS and it no longer appears in the Template Explorer. I check the template folder (C:\Documents and Settings\jonathon.prosper\Application Data\Microsoft\Microsoft SQL Server\90\Tools\Shell\Templates\Sql\) and the folder does not exist there anymore either. Then I restart Management Studio and the folder reappears in both the template explorer and the template folder!
Does SSMS save templates in a different location other than the folder above and "imports" the templates into this folder? I noticed that if I removed all the MS shipped templates elsewhere SSMS simply regenerates them next time I start it also.