XOOPS uses the Smarty Template Engine and XOOPS themes have Smarty tags embedded in the HTML code. Smarty tags are identified by the delimiters <{ and }>. If you see variables, conditionals or functions inside those delimiters, they are considered Smarty tags.
Smarty tags speed up site loading because the content of these tags have already been processed and compiled. So instead of creating a script to call out the site url, the username or even the theme folder, a Smarty tag is used.
The great thing about using Smarty tags inside the theme.html is that it allows better control of layout by having a Smarty tag represent a content instead of a php script. Smarty tags can be placed in between HTML tags to enable formatting.
As you go through the document, take note of the different Smarty tags used and how they are used in relation to HTML codes.
Learn more about Smarty at http://smarty.php.net.