Hi Hilary,
It is possible to set three types of roles for User Types. Setting these roles then determines which users and user groups a user has access to - provided that the user is in a group that has access to the Admin -> Security area's.
User - means that these user types will only be able to see and edit their details only
Local Administrators - means that these user types will be able to see and edit all users that belong to the same group(s) as them
Site Administrators - means that these user types will be able to see and edit all users across the system regardless of which group(s) they belong to.
These roles also play a part in other areas, such as in General Site Details -> Whats New Email - the list of users that are selectable here will only be those that belong to a User Type that has been set to Site Administrator.
Cheers,
David