What does the structure of a complete theme look like?

Package

• Theme
  • etc - come config files
  • layout - layout xml files that allow the blocks to be configured
  • template - the phtml template files

The maiin parks of a theme is made up of the layout files and the template files. The layout xml files define where the templates can be used with a tree structure and also defines which block classes are used with each template file. The templates are php files which contain mostly html although they do also have PHP.