If the work's been done and paid for, I don't really understand the problem.
If you quote for one template design, then hand over the tools for somebody else to use your organised layered file to more quickly roll out similar designs (say, with simple colour/photo changes) for a fraction of your price, without the experience that went into producing said organised layered file, and using techniques they may not know (although they might... I'm perhaps talking myself up a bit here, but the principle remains), then that's where the problem lies.
Like Jem, I would have included the .psd as part of the project in the first place.
I generally would, but would also generally consider such a deliverable when quoting the price... but in this case I am kinda constrained (by agreement with the app vendor) to a set price for the template design, and in the interests of keeping this flat-fee as low as possible for clients the provision of source files is not reflected in the price.
I'd just hand over the file for a minor fee, then sit back and have a good giggle at the unimaginable horror the design becomes. Who knows, she might come running back into your open (but now considerably pricier) arms when it all goes tits up. To resurrect an old acronym of mine: YGWYPF.
Yep, agree.
From what I've seen her other/new designer is decent enough graphically, but isn't very clued up. She declined a quote for a rotating image banner (including preparing the photographs, applying masks, configuring jquery effects etc) for the other guy/gal to create an animated (200x700px) GIF of 10+ frames of photographic content for $25!
What I've decided to do is hand over the source files for free, and make it clear it is a gesture of goodwill. No point being stubborn when at the end of the day I don't actually want any future work from her - the (flat) fee has probably only just covered the time spent reading and responding to an idiotic amount of emails from her (70+ and counting for a theme which only has two different page layouts!). I'll amend my terms for these kind of jobs (which I'm getting fairly frequent referrals for), so that I get more for releasing my source files to other people. That way it keeps costs down for clients who have no need for them, and I am getting some extra cash from the people who do want them and they can use/re-use them as they see fit.
Thanks for the comments/discussion folks... I'm not meaning to only reply to ory, but his is the most recent reply and it covered or re-itirated most of the relevant points

Gotta go, Thunderbird has just flagged up another email from her! The preview on the bottom of my screen seems to tell me she's buggered up the Facebook page URL she provided... sigh

Anybody want a client from St Louis? She's lovely, honest
