Setting Email Templates
I created an email message template for Sales Orders and selected it as the defualt Email Message Template on the SO Form. When I try to email from a Sales Order, I still have to manually select the template from a list of many others. Shouldn’t it default to this template?
I believe that the email template that you selected is going to be used when the email is generated by the system. For instance, when the “Send Transactions Via: E-mail” box is checked on the customer, the system will email the SO to the customer as soon as it is saved. Then it will use the template.
I asked a very similar question and got to the answer. It should help you too.