At this UVDUG meetup, Rob (rbayliss) presented on the Features module.
Features packs up configurations from different modules and creates a new module that can be installed on other Drupal sites. Some of the things that are exportable are Views, panels, CCK/Fields, Taxonomy, Feeds, Rules, User Roles & permissions. Many core configurations and those from contributed modules can be packaged into Features.
Best practices suggest we package Features logically (grouping like functionality), use version control, keep code up to date, and never change auto-generated code inside feature. You can, however, put custom code in the module file, and it'll be exported with the feature.
Features relies on contributed modules to provide export code for their structures, and there can be potential sync problems.
Features also integrates with Drush.