I downloaded Sql Server Management Studio Express with advanced features yesterday.

That download installed a version of Visual Studio 2008, but it seems to have only downloaded Business Intelligence Projects.

For example New->WebSite shows me a greyed out window with no templates to choose from.

New -> Project shows me only Business Intelligence Templates like Analysis Services Project

Should I download a copy of Visual Studio 2008 Express and overwite this one? Should I just search online for the templates I want.

I want to customize an existing "WebSite"

2)What is the best way to import an existing "WebSite" into Visual Studio?

After some further research, I believe that SSMS installed the Visual Studio Shell along with some Business Intelligence Templates, but not the full VS 2008 Exress.

So my question is: do I need to uninstall this shell? Or can I simply go ahead and download Visual Studio as though this shell was not there? 

Yeah, you can go ahead and download and install Visual studio. There will be no issue with the items that got installed with the SQL Express edition.  You don't have to uninstall these.

You have to download Visual Web Developer Express 2008 for creating and editing projects.

As u already installed sql server express, u can uncheck the option when u install vwd express