A template is a segment, but unlike a style-based segment, it is not bound to a particular style and does not have a fixed chord progression.
Instead of a chord progression, the template has a series of signpost group markers along a time line. Signposts, as explained in Authoring Chordmaps, are chords that mark the beginning and end of regions where variations in the chord progression are possible. When the author creates a signpost, he or she assigns it to a group.
Here's what happens later, either within the authoring tool or at run time, when the DirectMusicComposer generates a segment by combining the template with a particular style and chordmap. Each time the engine encounters a pair of signpost group markers along the time line in the template, it looks in the chordmap for a pair of signpost chords that belong to that group. If it finds a pair, and if the interval between them fits into the time available, it follows the chord progression between those two signpost chords as defined in the chordmap. If it is unable to find a path that works, or if there is no end signpost marker, the engine simply plays any chord from the group of the beginning signpost group marker.
The author might use templates in order to apply similar chord progressions, groove levels, and embellishments to different styles while composing segments. But templates can also be combined with styles and chordmaps by the DirectMusicComposer object at run time.