Right here is where I am.
I have added the tag manager code onto the file includes/templates/MYTEMPLATE/common/tpl_main_page.php

I have also gone into my admin/configuration/Google analytics and DISABLED IT
I have added into Google tag manager (GMT from now on) a tag called universal analytics.
New, product analytics, tag type analytics, configure enter tracking ID ua-xxxxxxxx and track type page view. Fire on all pages.

Then again in GTM add a variable under new. Constant and in the value add your GTM code.

Now, using chrome as a browser (important) I have added a widget onto the browser called Google tag assistant. This then tests your website to see if the tag is present and what it sees.
I have loaded my Google analytics as well and can see using the real time reporting that I'm on my website.

Hope this helps