Hmm...well I did indeed add my new faction to the player list so that's not the problem.
Obviously I did SOMETHING wrong though so I'll go mess with it some more....I just wasn't sure if the new sides were supposed to show up in the list automatically or not but now that I know they should I can narrow down my search for where I went wrong.
The only thing I can think of off the top of my head would be if you have to keep the same name when you add the new skirmish player as it is in the 'side =' part of the playertemplate.ini. Would this make a difference?