The D3DVERTEX structure defines a vertex in model coordinates that is unlit and untransformed by your application. All lighting and transformation will be done by Direct3D prior to rasterization.
Most applications use this type of vertex. Direct3D is optimized to take advantage of 3-D hardware that is installed on the user's computer. Therefore, letting Direct3D handle all lighting and transformations usually results in the best use of hardware acceleration. Most applications gain better performance by using the D3DVERTEX type.
Direct3D Retained Mode uses this type of vertex.