The above procedure is to make sure you have a backup of the old Smarty 2.5.0 if anything goes wrong ... if you want you can do it this way(thou you will not keep a backup of 2.5.0 on the server):
Do Step 1 as normal
Step 2 - uncompress the files and upload the contents of the lib directory to the directory called Smarty-2.5.0 (in xcart/), confirming you wish to overwrite all files.
Skip Steps 3 and 4
Do Step 5 as normal
I recommend you do it the first way, but wanted to show you that you didn't have to create another smarty directory if you didn't want to
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