Scrapbook 2: Basic Newbie Question Re Replacing Photos

[Lee]

Within a template's project page, there are photo blanks that you select, hit the button on the bottom of the photo blank, choose to replace the photo blank with a picture from your computer, then browsing through your picture folders, you should be able to select a photo to replace the photo blank in the work space.

When I select my photo, I see that "Replace" is automatically marked, and then I hit "Apply". Nothing happens. That is, I can't seem to get any of my photos into the templates.

I have checked all the online sources, but nothing addresses this basic problem. Documentation that came with product is very sketchy.