We have yet to be successful in getting a template from test into
production and be able to create a site based on it.

I see a number of posts related to this issue - with site templates
being implemented within a site collection. Unfortunately there is a
lot of information from different sources and I would like to get a
clear and complete definition of what I would need to do in order to do
the following task:

We have a test system that mimics production. We use it to create
prototype sites for users to play with and approve. Once approved, we
want to create the site as a template and move it to the production
system. Once in production the template will be used to create many
sites with the same base look and feel.