Lot's of good points others have made. Just one note, lots of people will say by using templates, you can have designers work on the HTML and you as a dev can concentrate on code. While I think that's great, I think the even greater power is the ability to easily re-skin a site. Combine multiple templates with some well structured CSS reliant html and it becomes very trivial to re-skin a site.

Right now, I have such a site up and running. Basically the back-end is XML, then a combination of a very simplistic mod_perl handler sitting on top of a CGI::Application app that uses HTML::Embperl to provide different skins based upon configurations. The mod_perl handler inspects the url, reads a config file based on url parameters and then jams the appropriate params into the HTTP stream (embperl templates, XSLT stylesheets, CSS stylesheets, other data ...). Sounds complicated but the neat thing is the CGI::Application is free of lots of conditional code. The only real conditionals are built-in default templates and stylesheets.

-derby