I believe that the error may be the result of a missing registry key as I was able to reproduce the problem that you described once I installed the Visual Studio 2005 June CTP.
I found that once I added the following registry key that I was then able to successfully create a VSTO project for Microsoft Excel.
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\VisualStudio\8.0\Setup\VSTO]
String Value
Name - ProductDir
Data - C:\Program Files\Microsoft Visual Studio 8\Visual Studio Tools for Office
Note that you may need to modify the path to the location where you installed Visual Studio 2005.
Hope this helps!
Regards,
Ken Laws
MSFT
Well, I have changed my registry key but not sure about the part whenre you say modify the install location of VS 2005...... How do I know I am in the correct install directory What are some files I should verify to confirm and in terms of modifying.....what would I be modifying the directory to

UNABLE TO CREATE EXCEL WORKBOOK PROJECT
ukrob
The Data line refers to the Visual Studio Tools directory and needs to be pointing to the equivelent installed location on your machine, IE if you installed on a D: drive it would need to be D:\program files\microsoft visual Studio 8\visual studio tools for Office
Additionally you need to make sure the .NET PRogramability is installed on your machine and is the Full Office 2003 installation.
Regards
Mike Walker MVP
Visual Developer VSTO