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    There's several steps you need to follow to begin using Smarty templates within XOOPS. A quick 
word of warning. I did not install and/or try this code so there may be a bug, so use this at your 
own risk - but the general idea is right...
First, change your code to something like this:
 include '../../mainfile.php';  
$xoopsOption['template_main'] = 'yahoo_feeds.html';  
include XOOPS_ROOT_PATH . '/header.php';  
 
require_once('class/simplepie/autoloader.php');  
 
// We'll process this feed with all of the default options.  
$feed = new SimplePie();  
 
// Set which feed to process.  
$feed->set_feed_url('http://news.yahoo.com/rss');  
  
// Set the maximum number of items  
$items_per_feed = 15;  
  
// Run SimplePie.  
$feed->init();  
   
// This makes sure that the content is sent to the browser as text/html and the UTF-8 character set (since we didn't change it). 
 $feed->handle_content_type();  
  
  
$c=0;  
$feeditems = array(); 
foreach ($feed->get_items() as $item) { 
    $feed = $item->get_feed();  
    if($c < $items_per_feed)  
    {  
        $feeditems[] = array('permalink' => $item->get_permalink(), 
                                 'title' => $item->get_title(), 
                                 'date'  => $item->get_date(), 
                                 'desc'  => $item->get_description() 
                            ); 
    } else { 
        // break out of feed loop if reached maximum number of feeds 
        break; 
    } 
    $c++; 
} 
    $xoopsTpl->assign('feed', $feeditems); 
include_once XOOPS_ROOT_PATH . '/footer.php';  
Then in /
{modulename}/xoops_version.php you need to add:
 // Templates 
$modversion['templates'][] = array('file' => 'yahoo_feeds.html', 
                                   'description' => "Display Yahoo Feeds Template");  
And finally you need to create the template file (./
{modulename}/templates/yahoo_feeds.html)
 <{foreach item=feed from=$feeds}> 
    <hr /> 
    <a href="<{$feed.permalink}>" target="_blank"><{$feed.title}>a><br /> 
    <b><{$feed.date}>b><br />  
    <p><{$feed.desc}>p> 
<{/foreach}>  
Then copy this to your module directory and make sure you update the module using the Admin control panel.