[geckoday]

The error is showing that you probably don't have your file in any directory on the include path. This is a little confusing because you are trying to do something in a way Smarty never intended it to be done. To do it the Smarty way you should be modifiying one of the X-Cart PHP files to get the data from the DB and make it available to the Smarty template and using the template to generate the HTML.

That said, I think the root of the problem doing it your way is that using the Smarty PHP tag is using the include path available at template execution time not at template compile time like a Smarty include. There are two things you can try.

Specify the full path like this:

{php}
include('{$SkinDir}/incdist.php');
{/php}

Or try using a Smarty include instead:

{include file="incdist.php.tpl"}

Then make file incdist.php.tpl your incdist.php file with the {php} and {/php} tags in it.

HTH