os.path.abspath(os.path.join(os.path.dirname( __file__ ), '..', 'templates'))
As far as where the templates folder should go, I don’t know since Django 1.4 just came out and I haven’t looked at it yet. You should probably ask another question on SE to solve that issue.
You can also use normpath to clean up the path, rather than abspath. However, in this situation, Django expects an absolute path rather than a relative path.
For cross platform compatability, use os.pardir instead of '..'.