I see some other potential problems... in your head.txt file (which I assume is head.tpl)
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>
<TD width="107"> </TD>
<TD><A href="{$http_location}"><IMG src="{$ImagesDir}/xlogo.gif" width="100%" height="100%" border="0"></A></TD>
<TD valign="top" align="right">
{if $usertype eq "C"} <<<<<<<<<<<<<<<<<< what is the purpose of this if statement?
{/if}
</TD></TR>
</TABLE>
<TABLE border="0" cellpadding="0" cellspacing="0" width="100%">
<TR>
<TD colspan="2" class="VertMenuBorder"><IMG src="{$ImagesDir}/spacer.gif" width="1" height="1" border="0"></TD>
</TR>
<TR>
<TD class="HeadLine" height="22">
{if $usertype eq "C"}
{ include file="customer/search.tpl" }
{/if}
</TD>
<TD class="HeadLine" height="22">
{if $usertype eq "C"}
{ include file="login.tpl" }
{/if}
<tr>
<td class="" width="100%">{include file="customer/hor_categories.tpl"}</td> <<<<<< this will be inside the cell above that includes your login.tpl (and that cell is not closed)
</tr>
<TD class="HeadLine" align="right">
{if ($usertype eq "C" || $usertype eq "B")and $all_languages_cnt gt 1}
<TABLE border="0" cellpadding="0" cellspacing="0">
<FORM action="home.php" method="GET" name="sl_form">
<INPUT type="hidden" name="redirect" value="{$smarty.server.PHP_SELF}?{$smarty.server.Q UERY_STRING|escape}">
<TR>
<TD>
<B>{$lng.lbl_select_language}: </B>
<SELECT name="sl" onChange="javascript
: document.sl_form.submit()">
{section name=ai loop=$all_languages}
<OPTION value="{$all_languages[ai].code}"{if $store_language eq $all_languages[ai].code} selected{/if}>{$all_languages[ai].language}</OPTION>
{/section}
</SELECT>
</TD></TR>
</FORM>
</TABLE>
{else}
{/if}
</TD>
</TR>
<TR>
<TD colspan="2" class="VertMenuBorder"><IMG src="{$ImagesDir}/spacer.gif" width="1" height="1" border="0"></TD>
</TR>
{******** Remove this line to display how much products there are online ****
<TR>
<TD colspan="2" class="NumberOfArticles" align="right">{insert name="productsonline"} {$lng.lbl_products} {if $config.Appearance.show_in_stock eq "Y"}{$lng.lbl_and} {insert name="itemsonline"} {$lng.lbl_items} {/if}{$lng.lbl_online} </TD>
</TR>
**** Remove this line to display how much products there are online ********}
<TR>
<TD colspan="2" valign="middle" height="32">
<TABLE cellspacing="0" cellpadding="0" border="0" width="100%" height="18">
<TR>
<TD><IMG src="{$ImagesDir}/spacer.gif" width="1" height="18" border="0"></TD>
{if (($main eq 'catalog' && $cat ne '') || $main eq 'product' || ($main eq 'comparison' && $mode eq 'compare_table') || ($main eq 'choosing' && $smarty.get.mode eq 'choose')) && $config.Appearance.enabled_printable_version eq 'Y'}
<TD width="100%" valign="middle" align="right">{include file="printable.tpl"}</TD>
<TD><IMG src="{$ImagesDir}/spacer.gif" width="176" height="1" border="0"></TD>
{/if}
</TR>
</TABLE>
</TD>
</TR>
</TABLE>