You can check the WSS v3 SDK regarding solution files.
Some short points:
the DDF (Diamond Definition File) determines what files are added to WSP file (really just a CAB) and where they are placed in WSP.
The Manifest.xml tells STSADM.EXE where to place the files contained in the WSP file on the server (/bin, GAC, controltemplates etc)
hth
AndersR
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