The map Type is the general format the level generator uses to create maps. Added in 0.31, it dramatically affects Indev mode in the availability of Water, Sand, and Gravel block types.
Water Warning
With the exception of Island, water that is generated on the map is the only water you can get. If the blocks next to the Water are removed dug/mined out) the water will instantly begin to evaporate for the water on that level. The level below will remain unless a block next to it is altered. You may add blocks to water but you cannot remove any without triggering evaporation.
Different Types
Island
The default map type. It's an Island. Water existing at the borders for as far out as you are willing to swim. Due to this, water is quite abundant and can be toyed with freely. The islands will have minor hills and cliffs.
Sand and Gravel are very common.
Water is quite abundant.
Floating
The second map type and possibly the most bizarre is "floating". In it, you will find multiple floating "islands". Each of these floats high enough that on "normal" view distance it appears as though there is no ground. Regardless of how far you dig gown, the fall will kill you unless you make a stair down to it. But there is no point as the entire "surface" is covered with Bedrock.
Sand and Gravel are fairly common.
Water is rare.
Flat
The third map type is kind of "boring" in comparison to the others. It's a flat land with no Water or Sand. Flowers and Trees can be found dotted around it, but with the exception of those and your inDev House it's barren.
Sand and Gravel are non-existent.
Water is non-existent.
Inland
The fourth map type is a slightly hilly landscape. In a nut-shell, it's the Island map type with infinite flatland at it's borders as opposed to water, causing the tiles that would normally be "under water" to be exposed.
Sand and Gravel are very common.
Water is rare.