Mage_Core_Block_Template in Magento
The most important feature of this type of block is of course that you can asign it a template file for rendering. That template will be a file stored on the theme level, so we could say this block is maybe the base block for Magento support of themes.
When the block it’s going to be rendered, Magento looks for the template file, first in the active theme, then in the default theme of the active package and finally in the base theme.
This block, as the others, may have child blocks nested. Child blocks are not automatically rendered but by calling getChildHtml from the template file.
The template file has access to all methods and data from the block, just by calling $this, as the template file is ‘included’ during the rendering phase.