To define a new variable for template.html i.e. {ADVERT} do i just need to add it to:
$template_vars array in theme.php
or does it require additional changes?
If you want to add a new token like that, you need to add a template var that contains the content you want to replace {TOKEN} with.
Place {TOKEN} in your template.html where you want it to go.
if your {TOKEN} is above {GALLERY} then you need to add the replacement instructions to function pageheader in theme.php
If it is below {GALLERY} then you need to add the replacement instructions to function pagefooter in theme.php
see this thread http://forum.coppermine-gallery.net/index.php?topic=9863.msg44419#msg44419