Microsoft provides ways to extend the out of the box functionality of SharePoint Portal Server 2007 e.g. Features, SharePoint Designer 2007, Windows Workflow Foundation etc. Features offer flexibility in terms of developing extended functionality – such as Page Templates, List, Content Types, Web Parts, Workflow and events – to new and existing SharePoint 2007 sites. 

 Introduction

The Feature framework has been extended to allow developers to create custom Features. Features can be deployed by using SharePoint Portal Server 2007 new form of deployment, namely Solution Deployment. Solutions are custom packages (e.g. .WSP file) or redistributable CAB files, created by developers and deployed by SharePoint Administrators. Administrator can deploy Features to individual site or to all Web front End Servers.

Check out http://www.codeproject.com/spoint/ExtendingSPS.asp for a tutorial