install worked, settings dont

I'm new to Umbraco, but a seasoned .Net dev who wanted to start using Umbraco for a number of websites so I dont have to do the basic updates myself. 

I've tried installing manually on my win7/VS2010 machine, as well as via NuGet, and I get the same issue. The settings area doesnt work. (The first thing I want to do is implement a custom template to customise the site to the client design).

When I hit the settings area its OK, but  but when I open "Templates" and then "Layout" in the settings tree, I get a 404.0 error on the right side. of the screen. 

It is looking for this URL:

http://umbraco2.local:80/Umbraco/Editors/TemplateEditor/Edit/storage$net_root$templates$_p__templates$_v__string$__Layout.c$html

Am I missing something? 

I've already had a look arround the wiki and documentation on GitHub and on this site, but I cant find reference to the problem. 

Any help would be appreciated.