Email Templates are customizable templates for user notifications from Private Messages , Forum posts and the Contact form.
The three pre-configured and supported examples are present in tabs. Everything option in these are for most parts self-explanatory.
Use Template : Enabled or Disabled
Template Format : HTML / Plain Text
Sender name : The senders signature
Sender email : The senders email
You can test a template before putting it live, you can also reset a template to its original state.