Hi Trevor
I've logged in and taken a look at your demo site which has Joomla 1.7 installed
It looks like you have installed a Joomla 1.0 template on Joomla 1.7 somehow (or at least one that doesn't work properly with 1.7). I suggest you uninstall it - it seems to be broken.
I downloaded a new free 1.7 template (Jubilee) from a reputable supplier (Joomlashack) and it installs and works. (Set to default - you will need to change to another template in Template Manager)
demotemplates.joomlashack.com/jubilee/
Your install seems to be working OK. I guess you could be trying to install templates or extensions that are not designed for 1.7. You must make sure that any template or extension you install is clearly marked as being for Joomla 1.7, older versions will not work.
Also occasionally suppliers supply extensions in a zip file containing a number of files which needs to be unzipped first - it's alway worth checking this ...
Hope this helps
Mike