The VM Guest tools contains scripts and drivers that are used to create virtualized machine images in SmartOS.
You can run './bin/build-image' which will create an ISO, ZIP and TAR archives for the tools. The tools include both the Windows and Linux tools. The reason they are created this way is so you can use an ISO to load Windows drivers during install time, and a tarball or zipfile after a system is up and running.
The windows directory contains signed VirtIO drivers, as well as some scripts and binaries that are used to retrieve metadata from the metadata API. In addition, sample sysprep files are provided that you can use to create your own windows images.
The linux directory contains the 'mdata-get' tool, as well as several other scripts for formatting a secondary disk, setting up networking, and fetching user-scripts. There is also a 'prepare-image' tool that is used to clean up a machine prior to turning it into an image.