Firstly, the default file location for Excel (at least in Excel XP) is in Tools | Options | General | Default file location.

Secondly, you're going about this the wrong way:

If this Excel spreadsheet is a "template", then you should save it as an XLT file (not an XLS file), and put it in the C:\Documents and Settings\user_name\Application Data\Microsoft\Templates directory.

Theoretically, there's a way to specify a location for shared templates, but I can't find it in Office XP.

Then your template will appear under File | New, and the user will be encouraged to save their XLS copy to a different location.