The testnet is a network separate from the main Bitcoin network that allows developers to attempt modifications of the bitcoin protocol safely and test in-development software without risking money.
The testnet is separate network from the Bitcoin main network where developers can test new protocols and new software without risking any actual money. The current iteration of testnet is testnet3 which came about because the after the prior two testnets began to be traded and have value.
The testnet is a completely separate currency that has no value. It has its own address types, ports, and nodes. It also has some modified consensus rules, notably one which changes the difficulty retarget algorithm to avoid making the difficulty too high and making the testnet unusable.