where are the cloned templates within the
public_html/ for the forum.
I've been tinkering with the newbb/template/ files and then
uploading them by FTP into the newbb/template folder. BUt this
will be replacing the original template set, not the custom template (or am I wrong in thinking this)
set. if I cut and paste them via XOOPS into the cloned templates there -
so they are stored somewhere!

Where are the cloned templates kept?! Can I upload the cloned template files by FTP or do I need to cut and paste each time?

Wow- not sure that will work at all.

If you go into your administration/system/templates you can find them there. Note: You can not edit the default template set. You have to clone the default template set and rename it. Then you can go into the templates for modules and make changes. Note: You will also have to go to administration/preferences/generl settings and set the template to the name of the template you just cloned so you can see the changes you make. Otherwise you will still be using the default template set which does not reflect your modifications/changes.

Quest

All the templates in XOOPS are stored in the Database. When first installing XOOPS and hading upload all the files to your server, during the installation process the content of the templates files is saved in the DB. When cloning a temlate set, the new cloned template is also stored in the DB only. When installing a XOOPS module, the content of its templates files is also stored to the Database. So everything is in the DB! When editing a cloned template set the changes are saved in the DB. So to change a template you have to do it through the templates managing pages in your admin area.
I think it would also work if you change what you need in the templates files of a module, then upload the files to the server on the place of the original and finally Update the module through the Modules administration page. But it's not a good way and it's not easier at all. So clone the original template and then just use the XOOPS admin interface to do what changes you need.
Good luck!