JMS 1.2.69 and joomla 1.5.25

I create slaves (3 actually)
all have independent databases with unique table prefix

I cannot make changes to the modules (html) of the slave sites. I"m just changing the test to change the url in the site module.

also if I change the menu link on a slave site it changes it on the master site. For example, if I configure a menu item on the slave site to "external URL") it also changes on the master site.
template setup is in attached image

actually what seems to happen is that changes made to the slave site's module effect the master(main) site and don't show up on the slave. So if I enable a module on the slave it stays disabled on the slave but it becomes enabled on the main and menu items change completely.

First, if you change something in a slave and that modify the master, this probably mean that you either share the thing or that you are in fact connected on the master and not the slave site.
In the second case, cross check that you correctly define the slave site domain. It is case sensitive and in general, you have to provide domain with and without the WWW

If you change file on the disk that is shared by all the websites, this is normal that is updated everywhere (ie, PHP code, HTML, CSS, ... - any file that you decided to share)

th strange thing is that the first site works okay, the next slave I create .... changed made to it are reflected on the master. I"m using the same template on both.

I may have figured this out ...If I duplicate/replicate a site and want to make individual changes to modules (for example I want to change the content of an html module on a slave site to reflect the "owner" and email of that site) I also need to move the modules folder? Is that correct?
and am I correct in assuming that components (like sh404sef and breezing forms) the same?

NO, you don't have to move the modules PHP code or duplicate the /modules directory.

The parameters of a module is saved in the DB and therefore you can setup the module with the back-end without copying or duplicating the module PHP code.