I agree that it is best to keep the file on the server and to have individual copies in each user's startup folder. Another method of accomplishing this is through the login script when the user signs in to the network.

It is possible to have user's startup folder location set to a shared network folder, but that has two big disadvatages. The first is that users with laptops lose files there when off the network. The second is that whenever any user has Word open that file will be treated as locked, so you will be unable to make changes unless you get everyone else off from Word.

See also Distributing macros to other users. Note that you can also share keyboard shortcuts, building blocks and QAT modifications through such a Global Template.

You should also look into the concept of the Workgroup Templates folder for document templates. My preference is to also update these through the user login.