Try this basic troubleshooting fix:
- delete the iWeb preference files, com.apple.iWeb.plist and com.apple.iWeb.plist.lockfile, that resides in your Home() /Library/Preferences folder.
- go to your Home()/Library/Caches/com.apple.iWeb folder and delete its contents.
- launch iWeb and try again.
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NOTE: In Lion and Mountain Lion the Library folder is now invisible. To make it permanently visible enter the following in the Terminal application window: chflags nohidden ~/Library and hit the Enter button - 10.7: Un-hide the User Library folder.
Thanks to you both. In answer to Roddy, I really haven't had time to try another template yet as I've been very busy but will have a look over the weekend. In answer to Old Toad, yes, I know about the invisible Library in Mountain Lion, and I'll have a go at your recommendations and see what happens. I know I'm just deleting preferences and caches, but I'm just confirming there's no risk of losing web content here? This is a client's website and he'd get VERY annoyed if anything went missing
There isn't much risk of losing the Domain.sites2 file but you really should have a backup on another drive and/or the server. Backing up to the server is a good option in case your home goes on fire!
You don't need to go into Terminal and expose the Library folder unless you go there a lot. Just hold down the Option key when clicking the Finder/Go menu...