Similarly to SPS 2003 / WSS 2, Sharepoint 2007 (MOSS and WSS 3) has both templates and definitions. Note that the end user is not aware of the difference between templates and definitions – they are both effectively sharepoint sites.
are the core definition of what a site is (they are contained in folders with many markup files), are stored in 12\Template\1033. Note that Sharepoint 2007 will be compatitible with Sharepoint 2003 definitions.
As per Sharepoint 2003, templates (.stp files) contain the differences between the site template that has been created and a definition that they extend. These are effectively cab files that are stored in the content db and can be create by an end user. It should be noted that sharepoint 2003 templates are not compatible with sharepoint 2007 (unless, possible, that the sharepoint 2003 definition on which they are based has been exported over to the Sharepoint 2007 deployment.
Note that Features are a totally new addition to Sharepoint 2007 – these extend definitions. I plan to write a seperate article discussing the ins and outs of these.