CCK

A field formatter is what CCK uses to format it's fields or in Drupal terms: theme. All that a formatter really is, is a theme function that's designed for CCK. Where ever a field is displayed it can have several options as to how it should be displayed. One example could be link fields which by default can be displayed in different ways, title as link, URL as link etc. This can be selected as standard for the node full and teaser views, but can also be used in different views where you thus can display the same field in different ways.