Give the "Creating Skins" documentation a try.
The problem you are experiencing has to do with caching. You need to configure the following web.config (or user.config) settings.
<add key="CombineCSS" value="false" />
<add key="MinifyCSS" value="false" />
<add key="CacheCssOnServer" value="false" />
<add key="CacheCssInBrowser" value="false" />
Once you are done skinning you will want to set all of them back to true.
The template I believe you are referring to is the layout.master file.
HTH,
Joe