I had the same thing happen. I am very, very new to wordpress, but I found that this did not work at all, and I suspect it is because it expects to use the included page template and not have it be a more normal page. I inherited a site and found that the prior developer had just rewritten the page template to make it work; and it did on a page with header disabled, etc.
When I tried putting it on a more normally formatted page, it failed (a) to put it in the right place, and (b) to recall any favorites.
(a) is because the function wpfp_list_favorite_posts, which first finds the keys, then invokes the page template, echos the values instead of returns them. This means the calling replace statement, instead of replacing the {{wp-favorite-posts}} with the contents, is inserting it some-random-place otherwise. I modified it to get the output to a variable and return it, and that properly located the output, but it was still empty.
(b) I never figured out, but it may be calling the query_posts outside of the main loop, which I understand is not recommended. But I never figured out why it would work in some cases and not others.
But (a) I’m pretty sure is just wrong — if the {{}} is supposed to be replaced, the called function needs to put the include in a ob_start/ob_get_clean or something similar so its output actually goes back inside of the replace statement as it was clearly written to do.
