Word 2003: TOC in document is failing if the template is not in its original folder

[SB]

Using Word 2003, if I don't have the template in the original folder from
where the document was attached and if I update the TOC in the document, I
get errors on almost every line (in the TOC).

When putting the template back into the same (original) folder, everything
works fine. Is this the way a template is supposed to work?
I thought you could detach the template and everything should still be OK.

Thanks,

Sylvia