Table of Contents:
Zend Framework provides a solid template engine based on php. The Layout is yet another name for template given by Zend.
A developer can use Zend Layout as a standalone template engine, also very good integration with Zend Application MVC architecture along with localization, translation and internationalization.
An Image worth 1000+ Words, here is an overview of Zend Layout in MVC in the form of image representation before you read anything.