Ok, the documentation on the web is a little confusing. So let me try to clarify it:

404 pages can be customized and used in the action/template settings.
500 pages can not not customized to use an action/template setting.

404 pages can be linked to action/template settings in the settings.yml file of your application by adding:

.actions
error_404_module: module_name
error_404_action: action_name

500 pages need to be setup in your web/errors/ directory under the error500.php page. This page does not take a template and is its own page.

UPDATE: in symfony 1.2 it looks like the error pages are now in config/error/error.html.php  (annoying)

-d