For a project we designed a new site definition which used the following directory:
C:Program FilesCommon FilesMicrosoft Sharedweb server extensions12TEMPLATESiteTemplatesSiteDefinition-Customer.Project.Moss2007.Portal.SupportSite
There was no problem at all to create a new site based on this template, but after a while we experienced a problem in a different area.

As you might know it is possible at the “Page Layout and Site Template Settings” page (/_Layouts/AreaTemplateSettings.aspx) to limit the selectable site templates for the user. Somehow SharePoint did not allow us to set our own template as only selectable template. After we saved the page, it would simply switch back to the previous known settings.

page_layout_and_site_template_settings_and_dashes

After a lot of research, I finally managed to solve the problem by removing the – sign from the directory name. It looks like SharePoint does some kind of internal split function at the “Page Layout and Site Template Settings” page, which makes it impossible to save settings for site templates with a dash in the folder name.

To prevent any trouble with your custom site definitions, make sure you don’t use a – sign in the folder name or even better: only use alphabetic characters.