What is a virtual machine (VM) template and when would I use it?

A template is similar to a clone in that it captures the state of a VM from a particular point in time.  It differs though because a template cannot be powered on like a VM.  Templates can be useful in situations where you want to create multiple VM's from a single source to maintain consistency.

Example - You run an application where you anticipate needing additional servers at some point.  You could create a parent server that already has the application installed and configured.  You would then convert it into a template and use it as your base image when you need the additional servers.  This could help you save time and keep your servers configured consistently at the same time.  

Templates do not use CPU, memory, or need to be supported.  This can help save money as you would only be charged for storing the template.