Hello;
it seems that vierstras' templates are a bit old. So they encounter some problems with new scripts.
You will find in attachment a modified version of Vierstra's 4waters templates, updated to 1.7.4 version.
However, in "admin/templates.php on line 62", the 1.7.4 code is:
$handle = opendir(ROOT_PATH.TEMPLATE_DIR."/".$template_folder."/media");
It calls to your template's media folder, where each html file describes how to manage each file extension. Have you added some files extensions not originally provided by the script, as *.doc, *.kar, *.psd or whatelse?
I have really enjoied Vierstra's templates since the beginning. I have downloaded them all and will try to make them compliant with the 1.7.4 version. Once done, I will send them to their original creator, hoping he will put them all online. It would be a pity to mess such pleasing templates.
Hoping having helped a little, regards.