Why is WordPress asking me to update my new (virtually blank) theme?

In addition to having the same name, I think it checks the folder name first for updates. You should also change your folder name if you are planning to distribute publicly, or if this is private, you can exclude it from update checks: http://markjaquith.wordpress.com/2009/12/14/excluding-your-plugin-or-theme-from-update-checks/. It would still probably be better to make the names in your theme something more unique, though.