@dgreen
You'll find this file in:
your store directory/include/templater/plugins
This file is the smarty plugin for the image generator - if you don't have this file then that could be the problem!
There's not actually that much required in the tpl files to make use of this, all they are doing is gathering up images to pass to this file.
From the install package the only truly important thing is the two extra .php files and the writable cache directory for the images - if you're having problems using this on different versions of xcart just try calling the "thumb" smarty function and pass it the path for an image you know exists to check if it works
eg in a tpl file somewhere include:
PHP Code:
{thumb file="images/somebigfile.jpg" width="150" link="false"}
You should get back a thumbnail 150px wide. If you don't then you have a problem with the install of the 2 php files or the images/cache directory.