In's a conditional that tell the templating mechanism whether or not to display the contained code. If you look at the php code sections you'll see that if there were no results to display, the $show[latestposts'] aray variable is left in it's default setting of false. In such a case, the html contained in that template is not shown. Otherwise, you'd end up with a table with only the header and no data. Basic templating procedures.
As far as nothing showing up, make sure that the conditions in the SQL meet your needs. By default it's set to return a certain set of stuff, excluding closed threads, and what not. So if you have the $query variable set too close to the $limit variable (for example, $query = 15 and $limit = 10) and 12 of them were closed threads, or threads the user doesn't have permission to see, the chances of a valid return is slim. Especially on boards with highly protected forums. The solution is to adjust the SQL and the variables, not the template. If you post more info on how your forum is set up and what you are 'expecting' to see, I might could help more.
And yes, the site design is all mine, including the artwork.