dear hasnut,
All files in
www.smarty.php.net/download.php are in linux zip format like smarty-2.6.6.tar.gz. Thats why I choose linux and already got rid of the installation part. but from where will I get the windows format?
I put my lib files in /var/www/smarty dir and templates in /var/www/html/smarty/guestbook
Another question

to ask :
in manual it says
to use seperate set of those directories for each applications and in my recently seen examples they always used the files index.php,index.tpl. Can I make as many templates as I like in /var/www/html/smarty/guestbook/templates folder and php files in /var/www/html/smarty/guestbook/