1. PHP (yep PHP itself is a template engine)
2. Smarty
3. XSLT – technically XSLT is also a template engine
4. PEAR::HTML_Template_Flexy
5. PEAR::HTML_Template_IT
6. PEAR::HTML_Template_PHPLIB
7. PEAR::HTML_Template_Sigma
8. PEAR::HTML_Template_Xipe
9. patTemplate
10. PHPTAL (port of Zope templates)
11. PHP Savant – reclaiming PHP
12. SimpleT – also reclaiming PHP
13. YATS – Yet Another PHP Templating System
14. phpBB template engine
15. Fast Template
16. Tiny But Strong
17. YAPTER (yet another yet another?)
18. Simple Turtle Template
19. MiniTemplator
20. TagTemplate
21. http://www.ultratemplate.com/main.php
22. Template Power
23. Virtual Template (French)
24. vLibTemplate
25. XTemplate
26. Richard Hayes Template class
27. Bugi Template (site is down? hotscripts entry)
28. bTemplate
29. Phemplate
30. Templeet
31. htmltmpl
32. PHPLib
34. TemplatePower
35. Muze Template
36. ETS – Easy Template System
37. AvantTemplate
38. Logic Template – not sure about this one – seems to be about turning PHP into an intepreter
39. varpage (formerly known as ShellPage)
40. PHP-DOM extension (HTML support)
41. Template-X
42. KTemplate (former Apolda Template)
43. EZ Template
44. 4Arrow Template Compiler
45. DTE
46. Enzyme Template (part of a mini framework)
47. dutchtpl
48. Xaraya – implements it’s own template engine
49. Bleetz
50. ASAPlate
51. ecTemplate
52. Freetemplate
53. FT
54. ModelIxe – site’s down right now but this one is interesting – it’s the guy that’s developing phpEdit and the Freshmeat description makes it sound a little ASP.NET like.
55. FastTemplate Clone – drop in replacement for FastTemplate.
56. PHP-Service
57. PHPTempt
58. Quick Template
59. Sledgehammer
60. Server Side Template Parser
61. Vanilla Object Oriented Templates
62. vBulletin – has it’s own template langauge
63. Invisionboard
64. ATemplate
65. ctlTpl
66. hierarchy template
67. InTemplate
68. lorenphplib_patternizer
69. MyTemplate
70. Path Wrapper
71. phpoot
72. Smart Template
73. Templato
74. http://www.raintpl.com/Quick-Start/
AND here a custom template engine tutorial
http://www.broculos.net/en/article/how-make-simple-html-template-engine-php