Custom templates make it easier to kick-off your writing. It will hasten your normal (usually mundane) ritual of setting up your desired formatting - such as text alignment, favorite font, or any other usual writing format requirements - when working with Pages.
There is a feature in Pages allowing you to save your own custom settings onto a template, making it easier for you to use and re-use each time you launch the app, with your specific preferences saved just the way you like it. By default, Pages already has a library of templates you can use right out of the box. Sometimes, however, nothing scratches an itch best than self-made, tailor-fitted custom templates for and by yourself.
In iWork '09, you can either start off Pages with the template chooser, or set a defined template to automatically load each time you open it. You can go full blown with pre-made brochures, or with fully laid out newsletters, graphic-laden posters, or you can also go as basic as using blank documents. If you are not in the business of making graphic intensive pages, blank documents would be fine.
However, using blank templates poses a problem: it is - simply put - too blank. There's no formatting in the template at all. It may be too plain for you, or you prefer another font to use, or you want your documents justified aligned all the time. Whichever the case when the blank template - or any other template - is not enough for your needs, custom created ones will come in very handy. And creating new ones will be discussed below.