(Edit: a few minutes later) Yay! It worked! So, there are two ways of saving/formatting templates:
- classic - this is HTML code; if you want to use a template created in HTML you have to use the "revert to classic" button in the Template tab.
- upgrade - this is XML code; it is the default setting for templates in Blogger so even though the little tab on top of posts and templates says Edit HTML, for the site templates its default setting is XML, which means regular HTML doesn't always work properly.