Bake is the same a "Flatten" - You can wear a skin texture, a tattoo texture, clothing textures and so on. So, for example with these three textures, you and everyone else must download all three textures to see them. This is why maybe people will be nude when they first login or TP into a place, because all that must be downloaded to everyone's viewer. What "Baking" mean is: The skin texture, the tattoo texture, and the clothing textures (in this example) are all sent to the LL server