A directory with several loose files is not a convenient package for distribution. So the final step is to make a package. This is a compressed archive containing the directory structure and all the files. The package can be in ZIP format (with a .zip extension), in TAR-gzip format (with a .tar.gz extension), or in TAR-bz2 format (with a .tar.bz2 extension).
If your template is in a directory mytemplate/ then to make the package you can connect to that directory and use commands like:
Note to template developers using Mac OS X systems: the Finder's "compress" menu item produces a usable ZIP format package, but with one catch. It stores the files in AppleDouble format, adding extra files with names beginning with "._". Thus it adds a file named "._templateDetails.xml, which Joomla 1.5.x can sometimes misinterpret. The symptom is an error message, "XML Parsing Error at 1:1. Error 4: Empty document". The workaround is to compress from the command line, and set a shell environment variable "COPYFILE_DISABLE" to "true" before using "compress" or "tar". See the AppleDouble article for more information.