You can't edit templates.
What you can do is to create a site based on the template; then edit the site (use SPD 2007 to change those words) and then save the revised version of the site as a Template (LendingLibrary2)
SP 2010 "FAQ" (mainly useful links):
http://wssv4faq.mindsharp.com/default.aspx
WSS3/MOSS FAQ (FAQ and Links)
http://wssv3faq.mindsharp.com/default.aspx
Both also have links to extensive book lists and to (free) on-line chapters