Site templates are a great feature in SharePoint that allow us to build a Web Site, customise it then save it as a template so that you can use the same template for other Sites. It is continued in this new feature also i.e. SP2010 but little bit in different manner !!
There are still Site Template in SharePoint 2010, but they're no longer .STP files. Instead, they're bundeled in the form of .WSP files just like web parts and features.
To create a Site Template, browse to the Site you want to create from.
->Go to Site Actions
–>Site Settings
–>Save site as template (under the Site Actions heading).
->Give your template a name, and don't forget to check the "Include Content" box if you want to include library and list content in the template.
This will create a new site template in your Solutions Gallery, which you can then use when creating new sites. You can also download directly from the Solutions Gallery to a .WSP file.
To upload a Site Template to the Solutions Gallery,
->go to Site Actions
–>Site Settings
–>Solutions Gallery (under the Galleries heading).
->On the Solutions tab of the ribbon, click "Upload Solution".
Before you close that dialog, you'll need to click "Activate" to activate it if you want your Site Template to appear in the "New Site" dialog later.
To use the Site Template, go to Site Actions –> New Site. You'll find your Site Template in the list of Installed Items, in the All Categories or Blank & Custom filters.
I hope the above the information will helps you to clear your doubts between the templates present in SP2007 & SP2010.
Please let me know in case of any queries,Thanks !!