Hey, pollyp. I no longer had the "XPS Document Writer" in my list of printers. I had most likely removed it from the list thinking it wasn't needed for anything.
It took a little bit of searching to find the download containing the XPS driver which was in
Microsoft XML Paper Specifications Essentials Pack containing the
"XPSEP XP and Server 2003 32 bit.msi", but once I installed that and did a reboot
then Visio's Database Model Daigramming template starting working properly again.