This template takes care of the essential structure of the HTML document. It includes the DOCTYPE (default is XHTML 1.0 Strict), outer html element, page head section including title, and adds any link and meta elements that have been set.
The file also has code to reference stylesheets and scripts, both as linked files and as inline text. There is also code to add links for RSS feeds (as opposed to general link elements). Note that all this data is passed to the template through the global Page object, which in turn gets if from individual page scripts and plugins. Nothing but the structural HTML is hard-coded in this file.
Unless, for some reason, you need to make changes to the basic structure of the page head, you should not need to modify this file. The structure of the page body, which you may very well want to change, is in the basic_layout_tpl.php template.