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These settings used to be saved in an XML file, now they are saved in the database, so its not going to work like you would have liked. It has to be done from the beginning.
in 1.7 it's the best to rename it before installing it (because of the db like Jeremy said) ...means:
download the template, unpack it, use a global search replace to change all instances of the name, change the file names that reflect the name, pack the template and install it ...
I've just done this on a template that is already installed and working fine.
First of all I took a backup of the complete file system for the site and also a backup of the DB.
Then I used Grep for windows to search the DB backup file for RT_oldtemplatename_j16 and replace it with newtemplatename.
Then I changed the old template folder name to newtemplate foldername.
Then did a grep search on the folder for RT_oldfoldername_j16 and replaced it with newtemplatename
Lastly, I went into /languages/en-GB and changed the oldtemplatename for newtemplatename.
This seems to have sorted it for me and it has taken me all of ten minutes.
Will report back if I notice anything wrong today.