Don't "open" the template.

Also, it has to be installed on the machine.... saved as a macro-enabled template to the Templates folder. In Vista, in the Save As dialog box, look under Favorite Links for Templates folder, or in the left pane very near the top, look for the Templates folder. I think the path is C:\Users\[user name]\AppData\Roaming\Microsoft\Templates

Then create a new document based on the template.

Office button > New > Under templates, My Templates. Select your template. Make sure 'Create New' is set to "Document" and click OK.