So I decided to roll up my sleeves and try out the T4 code generation built into VS2008.
I was going to work off of this article: http://www.olegsych.com/2008/09/t4-tuto
Try just creating a text file and giving it a .tt extension. VS should recognize it right away. You may just be missing the template.
Do you happen to use Visual Basic? T4 Toolbox only provides 4 project item templates for VB - File, Template, Generator and Unit Test. The other templates you may have seen in the tutorial screenshots are implemented in C# and generate C# code. It seemed inappropriate to make them available in Visual Basic projects.