No, you need to remove the opening and closing <html>, <head> and <body> tags from the code. So in other words, in welcome.tpl, simply add this:
<TABLE width="100%" height="1010" border="0" align="center" cellpadding="0" cellspacing="0">
<TR>
<TD style="BACKGROUND-COLOR: #83E1D3;"> </TD>
</TR>
<TR>
<TD height="1"><TABLE height="1" border="0" cellspacing="0" cellpadding="0"><TD></TD></TABLE></TD>
</TR>
<TR>
<TD style="height="1"><TABLE height="1" border="0" cellspacing="0" cellpadding="0"><TD></TD>
</TABLE></TD>
</TR>
<TR>
<TD valign="middle"><table border="0" width="75%" cellpadding="0" cellspacing="0" align="center">
<tr>
<td><table width="780" border="0" align="center">
<tr>
<td><img src="skin1/images/splash-01.gif" width="287" height="241"></td>
<td colspan="2"><a href="http://www.mytiddies.com/xcart/home.php?cat=266"><img src="skin1/images/splash-02.gif" width="448" height="274" border="0"></a></td>
</tr>
<tr>
<td width="287" rowspan="3"><div align="right"><a href="http://www.mytiddies.com/xcart/home.php?cat=253"><img src="skin1/images/splash-03.gif" width="267" height="562" border="0"></a></div></td>
<td width="254"><a href="http://www.mytiddies.com/xcart/home.php?cat=267"><img src="skin1/images/splash-04.gif" width="216" height="269" border="0"></a></td>
<td width="225"><a href="http://www.mytiddies.com/xcart/home.php?cat=254"><img src="skin1/images/splash-05.gif" width="252" height="269" border="0"></a></td>
</tr>
<tr>
<td> </td>
<td width="225"> </td>
</tr>
<tr>
<td colspan="2"><img src="skin1/images/splash-06.gif" width="468" height="260"></td>
</tr>
</table>
<p align="center"> </p>
<p align="center" class="style1">Welcome to Tiddies! </p>
<hr noshade style="COLOR: #006666; HEIGHT: 1px;"> </td>
</tr>
<tr>
<td align="center"><p> </p>
<p><a href="index.php" class="style2"><font style="font-size: 12 px; TEXT-DECORATION: underline;">ENTER THE STORE</font></a></p>
<p> </p></td>
</tr>
</table></TD>
</TR>
</TABLE>