Eli White has responded to Fabien Potencier's earlier post about templating languages in PHP with some of his own thoughts on the matter. Mainly that he has only a few exceptions to the comments Fabien made.
It's a good article, and I highly recommend that you all go read it. But I took a few exceptions to some of his arguments against PHP as a templating language itself, I think he grossly undersold PHP-as-template in his enthusiasm to promote his new templating language that he created.
Eli touches on four points of disagreement with Fabien's post - how verbose echoing a variable can be, how verbose the escaping of output can be, making control structures easy to read and how complex the templating language can get (quite quickly). He ends it by talking about one thing that PHP by itself can't give you but a templating language could - sandboxing (in agreement with Fabien's comments).