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Templates is a Mac OS X Service for the Finder, allowing a user to make any system object a template, with the ability to quickly and easily create new instances of that object based on this template. Templates can also take advantage of AppleScript in documents, allowing for scripted, and even interactive, behaviours in creating an instance.
When you install Templates, a default set of Templates is installed in the first location (unless you change the install location to your home folder). You can create a new Templates folder in the other location for private use. Now, you simply put any objects you wish to be templates in to one of these locations - Word files, Pages documents, even folders containing other files and folders.
You access Templates via the Finder Services menu, or assign a keyboard shortcut to the New... service and use that for easy access.