Thanks for your response. Let me re-state some things. The Photosuite 4 runs fine on WinME, WinXP and Win7. If a create a new templet .pzp file on any of those operating systems, the new .pzp file will open perfectly on the system in which I created it. So it is not a program compatibility issue with the program itself or the file saving and/or file opening capabilites.
The problem is that somehow, in the structure of a .pzp file created on WinME, there is something with WinXP or Win7 that they don't like and can't open or format the templet or deal with the thumbnails or something. The ols WinME .pzp file are recognized as a Photosuite executable file and if you double click on them the will open the Photosuite application, it's right after that that the program will hang up. It's an unusual behavior and I can't figure it out. Originally I thought it was trying to go from a file saved on a FAT32 computer and then trying to open that file on a NFTS computer. But I ruled that out with my most recent test.
Any other ideas?