Sorry, I forgot to answer the question about the version. I am using v1.2.0 RC4

I have already created the new DB in MySQL, it is ready to go.

Update your JMS version.
We have fixed some replication problem when working in other DB that were published with the JMS 1.2.3.
See FAQ for the procedure to get the latest version
/faq#sec-122

I installed v1.2.3, it did work differently, but an error was returned when I created the new site using the template:

This is the error:
Error [1064] query [CREATE OR REPLACE VIEW jos_users AS SELECT * FROM `u01`.`jos_users`]. DB Error: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near 'OR REPLACE VIEW jos_users AS SELECT * FROM `u01`.`jos_users`' at line 1 SQL=CREATE OR REPLACE VIEW jos_users AS SELECT * FROM `u01`.`jos_users`
Error [1064] query [CREATE OR REPLACE VIEW jos_session AS SELECT * FROM `u01`.`jos_session`]. DB Error: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near 'OR REPLACE VIEW jos_session AS SELECT * FROM `u01`.`jos_session`' at line 1 SQL=CREATE OR REPLACE VIEW jos_session AS SELECT * FROM `u01`.`jos_session`
Error [1064] query [CREATE OR REPLACE VIEW jos_core_acl_aro AS SELECT * FROM `u01`.`jos_core_acl_aro`]. DB Error: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near 'OR REPLACE VIEW jos_core_acl_aro AS SELECT * FROM `u01`.`jos_core_acl_aro`' at line 1 SQL=CREATE OR REPLACE VIEW jos_core_acl_aro AS SELECT * FROM `u01`.`jos_core_acl_aro`
Error [1064] query [CREATE OR REPLACE VIEW jos_core_acl_aro_groups AS SELECT * FROM `u01`.`jos_core_acl_aro_groups`]. DB Error: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near 'OR REPLACE VIEW jos_core_acl_aro_groups AS SELECT * FROM `u01`.`jos_core_acl_aro' at line 1 SQL=CREATE OR REPLACE VIEW jos_core_acl_aro_groups AS SELECT * FROM `u01`.`jos_core_acl_aro_groups`
Error [1064] query [CREATE OR REPLACE VIEW jos_core_acl_aro_map AS SELECT * FROM `u01`.`jos_core_acl_aro_map`]. DB Error: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near 'OR REPLACE VIEW jos_core_acl_aro_map AS SELECT * FROM `u01`.`jos_core_acl_aro_ma' at line 1 SQL=CREATE OR REPLACE VIEW jos_core_acl_aro_map AS SELECT * FROM `u01`.`jos_core_acl_aro_map`
Error [1064] query [CREATE OR REPLACE VIEW jos_core_acl_aro_sections AS SELECT * FROM `u01`.`jos_core_acl_aro_sections`]. DB Error: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near 'OR REPLACE VIEW jos_core_acl_aro_sections AS SELECT * FROM `u01`.`jos_core_acl_a' at line 1 SQL=CREATE OR REPLACE VIEW jos_core_acl_aro_sections AS SELECT * FROM `u01`.`jos_core_acl_aro_sections`
Error [1064] query [CREATE OR REPLACE VIEW jos_core_acl_groups_aro_map AS SELECT * FROM `u01`.`jos_core_acl_groups_aro_map`]. DB Error: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near 'OR REPLACE VIEW jos_core_acl_groups_aro_map AS SELECT * FROM `u01`.`jos_core_acl' at line 1 SQL=CREATE OR REPLACE VIEW jos_core_acl_groups_aro_map AS SELECT * FROM `u01`.`jos_core_acl_groups_aro_map`

Can you give us the MySQL version you are using.
You can find the information in JMS settings.

It seems that you MySQL version does not support the syntax we are using to share tables.

Based on MySQL.com website, this syntax was added in MySQL 5.0.1
http://dev.mysql.com/doc/refman/5.0/en/create-view.html

I am running MySQL Version 4.1.22

At this point, I'm just creating new empty templates. Then from the command line, copying the MySQL database from the template and replacing the db on the new site.

#mysqldump -u webadmin --password=password uTmpl | mysql -u webadmin --password=password u01;

This seems to be doing what I want. Hopefully it's not breaking something with the JMS setup.

I am suprised that you had access to the functionality to share the users with MySQL 4.x.

I will check JMS in that because normally it should disable the access to the sharing.

The sharing is only available with MySQL 5.0 or higher as explained in our Product detail.
In the User Manual it is still written 5.1.2 or higher but we have now a syntax accepted with 5.0.

To replicate a website, with MySQL 4.0 you can NOT use the sharing faciltiy that is given to you in the JMS template.

The problem is that you seems have enable the user sharing and the error you had received comes from a syntax that is used when sharing the users.