Just came across an interesting post by Ibuildings CTO Ivo Jansch, talking about the use of Smarty as a templating language over PHP itself. His argument comes down to the the cleanliness of the code; he considers Smarty code much easier to read and follow when used inside a PHP script as compared to PHP itself.
SugarCRM uses Smarty extensively as a part of our metadata, themes, and MVC frameworks to help separate the markup from our PHP code, and have built in several optimizations to our use of Smarty to avoid some of the speed penalties from using it. What does everyone else think about using Smarty as a templating language? Sound off in the comments with your thoughts.