Ah. I thought it was asking me where to put the new layout. I will try using layout1 when I get back to work tomorrow.
And there was never any doubt in my mind (well, only a little...) that the software is doing what it is supposed to do.
Thanks for all of your help. It turns out that I was doing everything right except for at the very end I was selecting a blank layout from my template. The reasons why this kept happening are too boring to go into at length; suffice to say it was a stupid rookie mistake.
With that operator error corrected, it works fine. Sorry for wasting your (and my) time with this.