I keep seeing themes as being labelled as metacity or GTK or Emerald. From reading in other places, I gather that Metacity is a window manager and changes the window borders, so what is a GTK theme? Isn't GTK a widget toolkit, used for drawing controls and other interface elements inside the window? and what is Emerald? can somebody please explain in simple noob-to-linux terms?
What you are referring to as a theme is probably a different kind of theme (in light of your comment on Uri's answer).
Those themes control GTK, Metacity, Icons, cursors, and sometimes wallpapers all in one. However, they do not control your emerald theme. What you are seeing referred to as a GTK, Metacity, Cursor, or Icon theme is what you get when you click customize.
Metacity is the window manager - the thing at the top of your windows that has the minimize, maximize, and close buttons. On Ubuntu 11.04 and earlier, you can customize your themes to change just that part of the the theme.
The GTK theme is the overall theme that handles stuff like the panel color, the backgrounds for windows and tabs, how an application will look when it is active vs. inactive, buttons, check-boxes, etc. Most theme packages also include a Metacity theme so that everything looks integrated.
An Emerald theme is like a metacity theme, but it is used when you are using Compiz to handle your window management. Compiz can do more visually interesting things than regular theming.
Note that Gnome shell uses "mutter" as its window manager which is Metacity implemented using the Clutter toolkit. Metacity + clutter = Mutter. :)
In Simple Terms.
Metacity is as you know, the Gnome Window Manager, which is sometimes replaced with the Emerald Window Manager via Compiz.
Emerald works on Gnome, KDE, XFCE and more.
A GTK theme, changes the window appeareance (colors), not the window borders.