Millennium-
Automator lingo is a bit confusing (thanks, Apple..) so let me try and clear it up a bit. Your first guess was correct.
Automator consists of two elements: Actions and Workflows. Actions are individual build blocks. They generally do just one thing; rename a file, print a file, scale an images, whatever. Actions
can be comprised of Applescripts, but they can also be straight up Objective-C.
A Workflow is a series of Actions you link together to perform your task. Workflows can be saved three ways:
1) As an Automator document (a .workflow file)
2) A Plug-in (also .workflow), which makes them available as contextual menu items and
3) An Application
A Workflow .app is really just an executable version of a .workflow file; it can be used as a droplet, or double-clicked, or reopened in Automator to edit. In any case, everything is compiled, so getting back to the original question, there is no way an Automator workflow or action can be used pre 10.4.
This dev page explains this all a bit more clearly than I:
http://developer.apple.com/macosx/tiger/automator.html