Cloning - to make a complete copy of the VM/Template with a new name somewhere else.
Clone to Template - to make a complete copy of a VM into a Template
Convert to Template - take a VM and turn it into a Template.
For the 20GB - 10GB question, it depends on the vmdk and the amount of data on it. The only thing I can possibly think of is to use some sort of backup utility or possibly a solution like Altiris to capture an image of the template. Honestly you would probably be better off building a new template or at least a new vmdk with only 10GB in size.
RE:the 20GB->10GB conversion. You could try http://www.vmware.com/products/converter/, convert the template to a VM then use the VMware converter to V2V the VM to a new VM with a 10GB disk, then convert that new VM back to a template.
I Converted a VM to Template VM had snap shots how to get it Back.