From 2008 Books Online:
A common table expression (CTE) can be thought of as a temporary result set that is defined within the execution scope of a single SELECT, INSERT, UPDATE, DELETE, or CREATE VIEW statement. A CTE is similar to a derived table in that it is not stored as an object and lasts only for the duration of the query. Unlike a derived table, a CTE can be self-referencing and can be referenced multiple times in the same query.
The really cool part of this is the self-referencing part.
I'm not going to try to teach you CTE here. Honestly, it's been done too well already. Here's a link to a favorite:
It does reference a few other documents (like I did with books online, above), again so as not to reinvent the wheel.
I wanted to share a couple of limitations in CTEs that I encountered this past week.
Requirement: Unlimited self-referencing / recursion in object definitions.
With the self-referencing objects, the problem that you have is the circular reference. With a CTE, you can limit this by specifying a recursion limit (i.e. "circle no more than X times").
Is this a good idea? Does it make sense to circle multiple passes through a set of objects once you've already collected all of the objects?
We ended up (in SQL 2005) using a temp table implementation (well, really, memory table not temp table). The reason: we needed to be able to say, "grab the next set of child relationships, but ONLY if we haven't already grabbed those relationships." The CTE limitation in sql 2005 doesn't allow mulitple recursive references.
Imagine my delight when I read the above: "...can be referenced multiple times in the same query,,," ... this in and of itself is enough to talk this particular client into going to SQL Server 2008.