First, if you have not already done so, set up your heading styles 1-9 according to the instructions at How to create numbered headings or outline numbering in Word 2007 and Word 2010. I say 1-9 because you can't easily add another level later. If you want to understand why these precise instructions have to be followed, spend an afternoon with Word's Numbering Explained by John McGhie, MVP.

You do not want to open the template as your document but create a document from a template. This is so once you have it set up, you don't have to do it again, and again, for each new document.

You are probably running into a problem with the keep with next and keep lines together paragraph settings in your styles. I normally have at least Headings 1 - 3 set to keep with next, but that is because I am using them as headings. I seldom use formatting for keep lines together outside of headings but simply rely on the widow/orphan setting.

I just checked the default settings of Headings 1-9 in Word 2007 and they are all set to keep lines together and keep with next. If all you are using are heading styles, without body text or other styles, you are going to get strange page breaks with these settings.