2
It is important you know the difference between the theme and the templates in order to be able to work with them.
The theme file (located in the /themes/ folder) defines the layout and design of your static page. It is the basic design layer of your site. It controls the design and layout of the static elements of your page, and positions the dynamic elements. The theme file is a static file, saved as .html, and contains Smarty tags for the dynamic elements. The static elements of your page you have to edit manually, and then upload to your server, in order for the changes to take effect.
The templates are for designing the dynamic elements. They're made of a set of html files, which are stored in the database, and they contain HTML code and smarty tags for the dynamic elements as well. The templates design a module's output, pages and blocks. Editing templates is done at the template manager, which you have already discovered.
More information can be found here:
http://wiki.xoops.org/wakka.php?wakka=XOOPSThemeDevelopersGuide(also see the links for the next sections at the bottom of the text!)
Herko