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Cascading Style Sheets contain style rules that tell a browser how to present a document. They change the way a web page looks by defining things like colors, fonts, layout, etc. The main benefit of using CSS is that it separates the content (HTML) from the presentation (CSS). This provides more flexibility because you can completely change how the document looks without having to make to make any changes to the HTML. To link a web page to a style sheet, you just put a line of code in the head section of your HTML, so you can apply a style sheet to multiple pages.
The main purpose of Dreamweaver templates is site management. If you have a lot of pages and want the layout to be consistent, then you can make a template that contains the basic layout. You can restrict areas that never change from being edited and define areas that can be edited. Then after making 100 pages, you decide that you want to change something in the layout. Instead of having to go into each file individually, you can just edit the template and the changes will propagate to all of the files that are based on that template. One thing to note is that your template could include CSS to define styles for the pages.
I guess the main difference is that CSS only changes the presentation of the pages, but templates can be used to change content as well (as long as it is an area that doesn't change from page to page). Hope that helps.
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