Thought I had this figured out but obviously I don't.

I have on my multisite template to "copy" the template folder.
I created a slave site from this template and it created a separate folder for templates under the new site dir. Yet when I go into the admin for that site it will not allow me to modify the colors on the milkyway template for that website.

Can someone explain what I did wrong?

TIA,

Tony

Which are the parameters that you defined to create the slave site.

If you have created a JMS Template with the "action" = copy for the template directory, this give you a physical copy of the /templates directory.

So, start to check that you have correctly created a physcial directory and not a symbolic link

Once you are sure to have a physical directory you can go in the back-end of your slave site and try for example modify the template parameter of the rhuk_milkyway or ja_purity

Also verify that you have correctly installed the patches.