I can't recommend Tiny But Strong enough. It's simply superb, especially if you work with web designers who use Dreamweaver (or use Dreamweaver yourself).
I've been using it for 3 or 4 years now and it hits all my sweetspots - straightforward, wysiwyg templates, efficient, lightweight, flexible, under active development and well documented. In fact it's the principal reason why I still do some sites in PHP rather than completely moving to Python which I prefer as a language - it's just that good.
There's a short article on their site which discusses how TBS differs from what they term 1st style templates (PHP itself) and 2nd style templates (Smarty and the like). The authors are French and the english is a little off (not that the actual documentation is anything but crystal clear) but it's worth copying the section about TBS here.
The goal is to simplify more the
previous approach, by having specific
tags no more coded but compatible with
the nature of the template. As far as
we know, TinyButStrong is the only PHP
template engine which enables wysiwyg
templates. Using the trick of relative
tags, you can define inside zones on
the visual part. For example :
[b;block=tr] defines a zone named "b"
and limited by the that
surrounds it. Thus, templates files
don't need coded loops or any
procedural syntax inside, they can be
created by authoring tools and can be
w3c valid. Previewing templates in
browsers are figuring something out.
This kind of template gives more
possibilities : Open Office, Excel,
... TinyButStrong doesn't work by
preassigning data, it merges them on
demand or sometimes automatically.
Keeping the idea of being simple, the
engine is not a framework or a
language but just a brick in your
application. It's only one file, one
class with 6 methods and 5 properties.
It also accepts plug-ins. It can do as
much as serious template engines and
is already widely used.
The part about the template system being a brick is very true. My personal default stack with it uses XAJAX and Mootools, but you can mix and match much more easily than you would with a full blown framework - not that it won't play nicely with virtually any framework you wish to throw at it. Some of the things you get for almost free too are wonderful - like the ability to direct output to excel reports rather than a webpage (using a simple plugin).
Check out their Testimonials and Sites pages.