A Sandvox document is a folder or package (in Mac OS X terms) where a site is stored on your computer. A Sandvox document acts like and is treated like a single file as far as the Finder is concerned, but it actually contains all the information about the document, including embedded media, in a number of individual files. It contains all the information necessary to publish the site.
When you publish a site, Sandvox uses the document to produce all the individual files that make up the published site, like this:
Keywords: document, documents, file, files, site, sites, content, contents, store, stored, disk, disc, svxsite, Finder, embed, embedded, alias, path, media, images, image