I often hear and sense confusion about SharePoint managed paths. Managed paths are essentially 'mount points' for site collections. There are two types of managed paths - Explicit and Wildcard. What's the difference between an explicit managed path and a Wildcard managed path? By default, the root ‘/’ managed path is explicit, meaning only one site collection can be in it and it assumes the identity of the managed path. That's how you browse to http://webapp.fqdn.msft and get a Web page. A Web application without a site collection in the root managed path will return a 404 error when browsing to the root. You could always create another explicit managed path for multiple portal support in a Web application, i.e. http://webapp.fqdn.msft/HR. HR is a peer to '/'. Now, you can no longer have an HR sub-site in the root - you will get a security validation error because the URL space is already taken.
A Wildcard managed path is basically 180 degrees in the opposite direction. A Wildcard managed path can support hundreds or thousands of site collections, but they are appended to the managed path, like http://webapp.fqdn.msft/sites/team, with sites being the Wildcard managed path. It will always return a 404 error when browsing directly to a Wildcard managed path. But, you can create many Wildcard MPs like teams or projects. Wildcard managed paths are like a sorting mechanism for site collections.
I hope this helps your Web application structure and design.
Ben Curry, CISSP, SharePoint Server MVP
Mindsharp
http://mindsharpblogs.com/ben
http://www.microsoft.com/MSpress/books/10623.aspx
http://www.microsoft.com/MSPress/books/12197.aspx