In the Smarty 3.0 release, for some odd reason the developer decided undefined variables in the template are errors. In Smarty 2.x undefined variables were treated as empty strings. This made a lot more sense to me. The whole reason I use Smarty is so I don't have to sweat details like this. 

I decided to find where in the code the error was coming from and make it work like it used to. My solution (and it may not be optimal as I didn't dig that deeply) is as follows:

1) Edit smarty/libs/sysplugins/smarty_internal_data.php and change the getVariable() function to:

    /**
     * gets the object of a Smarty variable
     * 
     * @param string $variable the name of the Smarty variable
     * @param object $_ptr optional pointer to data object
     * @param boolean $search_parents search also in parent data
     * @return object the object of the variable
     */
    public function getVariable($_variable, $_ptr = null, $search_parents = true, $error_enable = true)
    {
        if ($_ptr === null) {
            $_ptr = $this;
        } while ($_ptr !== null) {
            if (isset($_ptr->tpl_vars[$_variable])) {
                // found it, return it
                return $_ptr->tpl_vars[$_variable];
            } 
            // not found, try at parent
            if ($search_parents) {
                $_ptr = $_ptr->parent;
            } else {
                $_ptr = null;
            } 
        } 
        if (isset(Smarty::$global_tpl_vars[$_variable])) {
            // found it, return it
            return Smarty::$global_tpl_vars[$_variable];
        } 
        if ($this->smarty->error_unassigned && $error_enable) {
            throw new SmartyException('Undefined Smarty variable "' . $_variable . '"');
        } else {
			if (! $this->smarty->error_unassigned) {
            	return new Smarty_variable(null, false);
			} else {
        		if ($error_enable) {
					// force a notice
					$x = $$_variable;
        		}
            	return new Undefined_Smarty_Variable;
        	} 
        } 
    }

2) Now in your code, before calling the template, add this line:

  $smarty->error_unassigned = false; 

This assumes your instance of Smarty is called $smarty. The beauty of this method is that you don't have to turn off ALL error messages just to suppress the missing var message.