I don't see the need to use the HTML catalog, however I'm using an x-cart version pre-html catalog, so I don't know a lot about how it works.
What I've done instead, is edit my template files to use these static links anywhere a product is linked - The product templates, the best sellers list, upselling templates, etc., etc.
Then I created php files for my categories:
http://forum.x-cart.com/viewtopic.php?t=9313&highlight=
And now the majority of the store appears static. A benefit about this also, is that you don't have duplication in your store, you don't have to do any re-compiling, etc.