"FrontPage Server Extensions" is a term, which refers to the files, programs and specific way a Website is managed if it is developed using FrontPage.
"Microsoft FrontPage" has some unique features, such as the ability to easily create hover buttons and search forms for your Website.
This is possible only when the FrontPage Server Extensions are installed, because the features of FrontPage, such as hover buttons etc., work in conjunction with the programs installed on our servers to make those features work.
Without the Server Extensions (programs), your FrontPage site will not function properly.
Thus, the Server Extensions truly "extend" the functions of the server by enabling all the great tools that are part of Microsoft FrontPage.