Lila,
A seed file is MStation's term for a template. When you hit File/New, MicroStation makes a copy of your selected seed file and you give it a new name. The beauty of the seed file is that it can be used to standardize all new drawings that you create. That is because every new file that you create wil have the same global origin, color table, cell library attachments, working units, views, etc. as those that are in the seed file.
Also, MSta has configuration variables that, when set up properly, will point all MSta users on your network to the same seed files.
dscott