There currently is no concept of template variables in APM as you describe. We are looking to make improvements to application template editing in APM in the future and will consider the use of variables as a potential solution to ease this process.
This is exactly what I would like to do with the SQL Server 2005-2008 Performance (WMI) template so I can apply the template when used with a named SQL instance to multiple nodes but not have to edit all the components individually to add the specific instance name. Am I missing something or is it not possible?
You are not missing anything. This is a limitation of SAM 5.0 and is something we're currently working on addressing, as you can see in my "What we're working on" post for SAM.
