I've just created a Episerver 7 MVC project in VS 2010. First thing I do is to create a PageType according to this tutorial: http://www.youtube.com/watch?v=arvmWLkku4c.
When I log on to the CMS as web admin and tries to create a new page the only parent node to select is Root. Unfortunaly the Select button is dimmed out, and I can not continue onwards. What is the cause of this? Is it because I lack a template for my PageType?
Sorry, but I didn't get the question. Can you be more specific please? Do you have start page defined, do you see your created page type in admin section, where you are trying to create new page?
The select button is greyed out probably because you don't have any templates defined in code. Please look at this article and this should help you:
You will need a Model, Controller and a View for new template. Build your project and then you would be able to select new template from the list.