User defined datatypes let you extend the base SQL Server datatypes by providing a descriptive name, and format to the database. Take for example, in your database, there is a column called Flight_Num which appears in many tables. In all these tables it should be varchar(8). In this case you could create a user defined datatype called Flight_num_type of varchar(8) and use it across all your tables.
See sp_addtype, sp_droptype in books online.