I agree with CRich and bj, I do a combination of both on our small site. To me, it's always been a
balance between visual appeal and simplicity of use for the viewer, optimising for the spiders, and the ability to keep up with it all on a timely basis.
I think that weather you use templates or code manualy, the same rules of sound
SEO still apply.
Relevant content
Ease of navigation
Relevant backlinks
Keyword prominence and placement
Meta tags, alt tags,
and page descriptions weather you think you need them or not.