Experience Manager Content Types and Regions

I've seen and had questions about the relationship between SDL Tridion Pages, Regions, and Content Types with Experience Manager (XPM), the inline editing interface.

• User Harald Hoffelinck had the same question on StackOverflow. 
• I asked how to confirm how to control what gets added to a page as well.

The concepts can easily get blurry, considering the definitions:

• Region = schema and template combination that instructs what template to choose when adding a Component Presentation
• Content Type = schema and template combination (along with a prototype/dummy component and a location to save new components)
• Component Presentation = specific component (based on a schema) and a template of course

Even in our designs, we might even use region and content type interchangeably.
Basically, in XPM we can use:

• Regions by dragging a component from the library onto a region, which adds a CP based on the region’s template settings. For insert to work, you should have only one template per schema per region, otherwise it's ambiguous for XPM ("add components based on this schema with this template... or this other template?"). Update: this is just a limitation of the insert option, multiple templates for a given schema work for drag-and-drop.
• Content Types when creating a new component; give us the right template, dummy fields, and folder location as defined in automatic or custom content type settings
• Component Presentations, available by default, when inserting existing content from the library (this is when XPM adds the oldest component template associated to the same schema, otherwise you can add Component Presentations based on existing schemas and templates on the current page)

Regardless, both Regions and Content Types add component presentations.

• Regions create LOCATIONS on a page and restrict WHERE you can add existing Components. You drag existing components onto regions or insert them into the page.
• Content Types define WHAT new Components look like and HOW they're created.

In even fewer words, Regions are locations. Content Types are things.

• Regions accept existing content.
• Content Types create new content.

By way of analogy, A Content Type is to Component Presentation as a Schema is to a Component.