As the name says, by using this page template you  will be able to display the latest posts of a certain type. Available posts types are ‘posts’,’galleries’ and ‘pages’. Thus this page template can be used to create a Blog page, a portfolio page, a home page that displays a few blocks linking to different pages or just any other page that you may think of.

When the ‘Latest posts types’ page template is selected, a meta box with settings will be available:

These options will help you define the content type (by selecting the Post Type and filter by categories), select the desired layout (8 layouts available) and define the number of posts.