To apply a custom MasterPage to a site in SharePoint 2010:
1. From the Site Actions menu, click New Site.
2. In the Create dialog we'll choose Team Site and call it New Team Site, and click Create.
3. In Sharepoint Designer we've copied the v4.master and re-named it v4_custom.master. I've added a div with some jQuery on it to confirm we're on the custom MasterPage once we've made the switch.
4. Now looking back at our new team site, under the Look and Feel and feel section, we have no options to change the MasterPage, let's fix that.
5. Going back to the root site, we'll click on Site Actions and choose Site Settings.
6. You'll notice here as well, we have no options under Look and Feel to change the MasterPage. On this page, we'll click Site Collection Features.
7. From here we'll activate SharePoint Server Publishing Infrastructure. Find this feature and click the Activate button.
8. Going back to the root site Site Settings, we'll see we have more options available to us now, but still no MasterPage option. Click the Manage Site Features.
9. From here we'll activate SharePoint Server Publishing. Find this feature and click the Activate button.
10. Going back to the root site Site Settings, we now have a Master Page link under Look and Feel.
11. Now we'll go to the Site Settings on our New Team Site. Click the Manage Site Features under Site Actions and activate the Sharepoint Server Publishing just like in step #9.
12. Now we'll have the Master Page option under Look and Feel. Click this link and we'll get the Site Master Page Settings page. From here we can select the "Specify a master page" radio button, and select our customer Master Page from the list and click OK.
13. Now if we surf back to the New Team Site homepage, you can see I have applied a custom Master Page. Look above and to the right of the business people in the picture, you'll see a winking emoticon ;). This is the button for my jQuery panel that extends out when clicked.
This is a quick an easy way to apply a custom Master Page to a new site. A drawback to this solution is the custom Master Page will have to be set manually after creating the site, so depending on your needs this may or may not work for you.