Marketpress and New Blog Templates Plugin error 404

So i edited my main theme for my main page and i like the way it looks.
i then edited /template and got it the way i want it.

so i go to Blog Templates and create a template based on /template and set it as default.

Now whenever anyone or myself creates a new site it says "page not found".

anyone know why this could be?

is it because the url is /template, and when New Blog Templates plugin asks for blog ID, i just put "2", because that is the order in which it was created?