Version: (using KDE KDE 3.5.8) I have template ========= A B%CURSOR C ========== but when I use it, cursor is placed before A.
I can not reproduce this, neither with enterprise 20070904 nor with trunk. I added your example template to Settings->Configure KMail->Composer->Custom Templates, choosing "Reply" as template type. Then I selected a message, right-clicked it and chose Reply->Reply with Custom Template->[template I just created]. That worked fine for me. Did you do something else?
Hah! Nailed. Cursor only works properly if you don't use signature (in this case). I use signature (I mean configured in KMail) and immediately %CURSOR behaves like I described above -- it is ignored. Can you confirm it? Sorry for omission, but I use signature by default almost for all my accounts. And one more thing, === denotes template limits, so the template contains only ABC and %CURSOR.
Ah, I see. This is fixed in trunk already.