After Effects must be installed. This is just like any other feature that relies on Dynamic Link: After Effects is being called behind the scenes to render the results.
thanks for the quick response Todd. Is there any other way to create editable templates for other users without After Effects? I work for the ABC in Australia, my department is moving to Premiere Pro from FCP7 where we previously used templates created with Motion in the same manner. I want to create lower third templates where the user has no control over anything other than the text contents and duration of the graphic, if users have control over font/size/style/animation timings etc then we often lose consistency.
I work on a TV station too and I'm also interested in this feature. Have you tried to install AE on a client as trial and see if Premiere can use AE Render engine? It could work like if you have an AE rendering farm (where you can still install on multiple machines but as render nodes).