First, one can follow the instructions at http://wiki.joyent.com/wiki/display/jpc2/Creating+Your+Own+SmartMachine+Image
I found that creating the snapshot locally to the compute node, as mentioned near the bottom, was insufficient, but your mileage may vary. I used the UI to snapshot the templated VM. In my case, I used the Smart64 image as my base OS image to then customize as mentioned, such as adding tomcat, services, and configurations.
One step that I found problematic is the meta data creation. The commands for doing this were found only in Smart64 or similar instances, and not the underlying nodes or SDC head node zones. I created a new Smart64 instance for template manipulation, pointed it to my cloudapi host using the "sdc-setup" command, and after configuration, used sdc-updatemachinemetadata from /opt/local/bin. The specific command I used for my meta data example was:
sdc-updatemachinemetadata -m image_name="tomcat" -m image_version="1.0.1" -m image_description="tomcat appserver" 99199472-bae6-4c89-a7ef-d6d4cf736feb
The final part of that line is the zone uuid after it has been shutdown. The final step is to run sdc-create-image, a script that is only available internal to Joyent. Please contact your team rep to get this. Once you have it, your image publishing is a trivial command, run from the head node:
With that, your new template is created, and your users can not pick your new application image to instantiate.