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Template overrides are a way of changing the way Joomla shows something without changing the basic or core Joomla system. A template override is a layout file that is placed in a special subfolder of the template. If found, it will replace the standard layout file for that template.This means that as Joomla is upgraded to new versions you will not have to repeat all the changes you made.

Template style is a feature introduced in Joomla 2.5 that allows users to assign different template styles to individual menu items. By default, Joomla! assigns a template style to all menu items upon installation. A yellow star indicates the default template style in use. A default template style can be partially or completely overridden by assigning different template styles to the desired menu items in order to obtain a different look for their respective pages.

A template style can be assigned to menu items one of two ways.

Template manager Extensions ? Template Manager

Editing a menu item under Menus ? Menu Name ? Menu item

Reference: http://docs.joomla.org/Glossary

A template is a type of Joomla! extension that changes the way your site looks.

There are two types of templates used by the Joomla! CMS: Front-end Templates and Back-end Templates. The Front-end Template controls the way your website is presented to the user viewing the website's content. The Back-end Template controls the way your website's administrative tasks are presented for controlling management functions by a Joomla! Administrator. These would include common tasks such as: user, menu, article, category, module, component, plugin and template management.

Reference: http://docs.joomla.org/Glossary