To the user, a thin client behaves like a regular desktop computer. To the administrator, a thin client has no storage of its own, is easy to maintain, and can give the user a modern computing experience even with ancient hardware.
A thin client is a computer in client-server architecture network which depends primarily on the central server for processing activities, and mainly focuses on conveying input and output between the user and the remote server where the application program is actually being executed. The thin client computer functions as a very smart graphic terminal. More extensive introduction: http://en.wikipedia.org/wiki/Thin_client
UbuntuLTSP - Ubuntu LTSP Community Wiki
ThinClientHowto - General overview of Thin-Clients and guide to setting up LTSP - Linux Terminal Server Project. ( older versions)