I am Steve. on another note....
change
<td><img src="skin/common_files/images/spacer.gif" width="10" height="5"/></td>
to
{if !$smarty.foreach.foo.iteration % 3 = 0}<td><img src="skin/common_files/images/spacer.gif" width="10" height="5"/></td>{/if}
and you won't ahve the extra space after the 3rd product in each row. of course change foo to the name of your foreach loop.