This question comes up pretty often so I decided to create a video and document that goes through setting up a custom AutoCAD drawing template. There is no sound with the video but it will quickly demonstrate how to go about modiying a drawing template. The document follows the video and describes the commands used to get to the different potions of AutoCAD.
Video Link: http://www.microvellum.com/download/blog/Drawing%20Template.html (7 minutes)
Document Download: http://www.microvellum.com/download/blog/Setting%20up%20a%20Drawing%20Template.doc