You can access Project Templates from Menu > Admin/Manager > System Setup > Global Lists > Project Templates.
Or from the Projects page (if you have the necessary security right), then click on More > Project Templates.
Add/Edit Project Templates
From here you will see your list of existing Project Templates.
Clicking on a template will open it up for editing. For example.
Notice how it looks like a project, but with a lot less features. This is because the templates only allows you to edit what can actually copy over to a new project.
At a minimum, you will want to ensure all your templates have a full schedule. Where there are tasks with durations, and the assignments all have services with allocated hours.
Depending on your business needs, you can templatize other aspects, such as Estimates, Specs and Deliverable Workflow.
Setup and Details
Schedule - Here you can establish your typical workflow for this particular template. For more info on how to edit your schedules, refer to the Project Schedule guide.
Estimates - This can be left alone if you build estimates each time you create a project. However, some advantages to having an Estimate as part of your template is you can have the Expenses section already filled out ahead of time. Or have multiple estimates, for differing values, that you can pull from and approve. To the point they can even be used on an Opportunity during your sales process.
Project Settings - Here you can control some advanced functions of the Template. But mostly so you can make the Template active or inactive.
Team - Typically this is left blank. As you can use Account Teams setup per client. However, if you do add users to your team in a template, keep in mind they will copy over to the new project, in addition to any client setup team.
Specs - You can add specs to be part of the template to save time from having to add them after creating a project.
Files - While you may not want to have any actual files as part of your template, since it would just duplicate the files. What you can do is establish a Folder structure within the Files section of the Template, as it will copy the folder structure to the new project.