This document assumes that your webserver and php5 is running.

Download Smarty - http://smarty.php.net

Installation - Windows, IIS/Apache, PHP5
Extract files, rename Smarty.x.x.x to smarty (suggest OUTSIDE of your www root!)
Example: d:\smarty
Run phpinfo.php to find out your php.ini location
Edit php.ini's include_path and add the location of the libs folder.
example: include_path = ".;d:\smarty\libs"
Restart IIS/Apache
Setup these two folders INSIDE your www root:
(wwwroot)/smarty/templates (this is where your templates will go)
(wwwroot)/smarty/configs

Setup these two folders OUTSIDE of your www root:
d:/smarty/templates_c
d:/smarty/cache

Setup security settings for the webserver to write to these four folders

In (wwwroot) create index.php and in (wwwroot)/smarty/templates/index.tpl with the following code:

index.php:

template_dir = 'd:/inetpub/wwwroot/smarty/templates';
$smarty->config_dir = 'd:/inetpub/wwwroot/smarty/config';
$smarty->cache_dir = 'd:/smarty/smarty_cache';
$smarty->compile_dir = 'd:/smarty/smarty_templates_c';

$smarty->assign('name','fish boy!');

$smarty->display('index.tpl');
?>

index.tpl

Hello, {$name}!

Now open index.php in your web browser (requested from your webserver)

http://webserver/index.php

You can work this out to a referenced script/class:
smarty_connect.php:

Smarty();

		$this->template_dir = ' d:/inetpub/wwwroot/smarty/templates';
		$this->config_dir = ' d:/inetpub/wwwroot/smarty/config';
		$this->compile_dir = 'd:/smarty/templates_c';
		$this->cache_dir = 'd:/smarty/cache';

		$this->assign('app_name', 'Intranet');
   }
}
?>

index.php:

assign('name','Ned');

$smarty->display('index.tpl');
?>

index.tpl:

 Hello, {$name}!

If you are getting an error that Smarty.class.php isn't found chances are that your include_path isn't correct or you didn't edit the one that the webserver is using, check your phpinfo.php!