Didn't work either, but it's a but more concise:
Code:
<!-- START - TEST FOR AVATAR HACK -->
<if condition="$show['avatar']">
<if condition="is_member_of({$vbulletin->userinfo[usergroupid]}, 79)">
<td class="alt2">
<a href="member.php?$session[sessionurl]u=$post[userid]">
<table border="0" cellpadding="0" cellspacing="0" width="200" height="200">
<tr>
<td width="200" background="badge.png" height="200">
<table border="0" cellpadding="0" cellspacing="0" width="100%" height="125">
<tr>
<td width="25%"> </td>
<td width="50%"><img src="$post[avatarurl]" width="125" height="125" alt="<phrase 1="$post[username]">$vbphrase[xs_avatar]</phrase>" border="0" /></td>
<td width="25%"> </td>
</tr>
</table>
</td>
</tr>
</table>
$vbphrase[xs_avatar]</phrase>" border="0" /></a>
</td>
<else />
<td class="alt2">
<a href="member.php?$session[sessionurl]u=$post[userid]"><img src="$post[avatarurl]" $post[avwidth] $post[avheight] alt="<phrase
1="$post[username]">$vbphrase[xs_avatar]</phrase>" border="0" /></a>
</td>
</if>
</if>
<!-- END - TEST FOR AVATAR HACK -->