What is the version of your OS , XML Publisher and Word ?
Did you install the BI Publisher Desktop from the PeopleSoft application page or download the software from the Oracle Technology site? And was the BI Publisher plugin installed with admin access rights?
What version was the BI Publisher installed -32 bit or 64 bit?
If you are using MS Word 2007 :
Go to Word Menu -> Word Options -> Add-Ins -> Manage (Choose Disabled Items) -> Click Go -> Select and Enable the required plugin.
The TEMPLATE BUILDER was not available from the Add-Ins list of Word.
By copying the TemplateBuilder.dot file to the STARTUP folder directory of MS word, we were able to resolve the issue.