Sorry I panicked.
This is what the manual says:
QUOTE
I get an error about .new files when rebuilding
When rebuilding a page, Movable Type first writes the page data to a temp file, then renames the temp file to the actual file name. The temp file is named with an extension of .new; for example, if the file index.html is being rebuilt, the temp file would be named index.html.new. Movable Type does this to prevent corruption of your public files; if, for some reason, the rebuild process is killed in the middle of writing data to a file, that file will not be complete, and will appear corrupted to a web browser.
The process of writing to temp files requires that permissions on the Local Site Path directory be set to 777; some users can not--or would rather not--set the permissions this liberally, and will then receive errors when Movable Type is unable to write to the .new temp files. If this is the case for you, you can turn off the use of temp files. To do so, edit your mt.cfg file, and add the line
NoTempFiles 1
This will tell Movable Type not to write data to temp files, and you should no longer receive errors when rebuilding.
It seems like the permissions to my directory got reset. I have no idea how that could have happened but it did. Anyway, I should have read the manual first