Actually, according to WordPress' own documentation, adding the custom template lines should not have been necessary for individual pages, as shown on this page.
It actually seems to be broken.
On one installation of WP ver. 2.8.4, I have working home.php, as well as several other individual template pages like sitemap.php, contact.php, about.php, etc. They work perfectly because they match the page name, so they are used instead of page.php, without any additional statement at the top identifying them as custom template files, and no editing is needed in the Page either - so I just leave it as default template and WP knows which template file to use based on the page name.
You only need to create a custom template, and use the lines supplied by RVoodoo at the top, if it's a template file you want to use across multiple pages which would not match either name, slug, or ID, to the template file. An example would be a set of pages where you want to call a different header, sidebar, or footer file.
So RollandRocks attempts -
For my home I tried
- should have worked perfectly too, in keeping with the normal template heirarchy spelled out in the Codex. The fact that it didn't indicates a broken installation.
On another WP installation I have, of the very same version (2.8.4) the normal template heirarchy does not work.
So the question remains, why not?