Knowledgebase
How to add and edit email templates in Magento
To edit and add templates used for transactional email messages, log in to the admin panel of your Magento and go to System>Transactional Emails. On the page that opens click on the Add New Template button that's in the upper right corner. On the following page you can load one of the default templates, edit it and save it (it will be saved as a separate template), or you can create a new template without using one of the preconfigured default templates. To load a template, select one of the preconfigured templates that come with Magento from the Template drop-down menu (it's in the Load default template panel) and click on the Load Template button. The text fields in the Template Information panel (with the exception of Template Name) will be filled with the settings of the loaded template.
For the content of templates HTML is used in combination with different variables. If you don't want to change the format and style of the template but just the text, you can edit only the text without changing the HTML code. To see what the template will look like as seen by the customers click on the Preview Template button in the top right corner. After you're done click on the Save Template button.
You can then change the templates used for transactional email messages. There are options for that throughout the system settings. To change the templates used for welcome emails and email confirmation messages go to System>Configuration>Customer Configuration button in the Customers section on the left>Create New Account Options panel on the right. To change the template for forgot your password emails use the respective option in the Password Options panel that's on the same page. To change the templates used for the different sales transactional messages (e.g. order confirmation, shipment confirmation, etc.) go to System>Configuration>Sales Emails button in the Sales section on the left, expand the panels on the right and edit the template settings.
For some more details and screenshots check out the tutorial on how to manage email templates in Magento.