HI AtoZ
From what i can see by your code, what ever program you are using to edit with, it is taking our your <% and putting the html text equivalents. You probably used a wysiwyg type editor to edit this template. You need to check and correct your actual html code.
In the html <%category%> should be changed to <%category%>
This is the same for any of the other none working includes. I have used many different programs in my career, so far FrontPage Editor is my choice for making multiple changes, corrections, and updates to templates in a hurry and keep my code intact. If you set up a mock Links directory on your site and start making the necessary changes on your computer, just remember includes usually wont show up on your computer. just remeber where you put them . Use the program to place cursor where you want one then choose show HTML( works in most Wysiwygs) and hard code the includes.
*** A list of includes is in your Admin help area
If you have any further questions or need any help go to www.ebthemeshop.com or send an email to acechase@ebwares.com I am the site administrator and creator. We specialize in making templates and other stuff for a variety of different programs.
Good Luck