tag? Check your theme file for errors.
Also, set the system preference you described to "No" and see if that changes anything.
If you're still having problems, feel free to post back for more assistance. Good luck with your site!
-zimmi88 =)
EDIT:
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Oooooohhhhh... just looked at the source output... for the smarty vars, it's using lt and gt (left incomplete so the text renders correctly) tags when it should be using < and >, respectively. Try finding & replacing the "&" tags with < and >.