in terms of speed and low cpu loads, is this a good way to go?

$html = file_get_contents("home.tpl");
$html = str_replace("%fname%", $firstname, $html);
$html = str_replace("%lname%", $lastname, $html);
echo $html;

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"Things you can get access to, you should never memorize." -Albert Einstein
"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin

The method is fine, it doesn't allow for much growth templating wise though.

It's ok if you only need search&replace.

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This is more of a general comment than anything particularly specific to templating but remember that str_replace can accept arrays for the first three arguments (respectively: search, replace, subject). This saves the overhead of calling the same function more than once in succesion, and prevents you from repeating code unnecessarily. More simply, you could use: