A. When SCCM stores and distributes packages for distribution, it does so in a compressed format. This compressed version of a package is the PCK file. These PCK files are stored in the SMSPKG folder. They are then uncompressed and copied to the distribution point folder, such as  SMSPKGe$, for use by clients.

One thing that may surprise you is that you may see this SMSPKG folder with the compressed versions of packages on SCCM site systems that aren't distribution points. This happens if you have multiple sites and a server (which isn't a distribution point) is configured as the target for sender channel. Because all communication is via this named box, it has to store the compressed packages and then forward them to the distribution points in its site.

It's possible to delete the PCK files once they've been distributed to the distribution points, but it's not recommended because if a change to the package is made, the entire package will have to be replicated to the server. If the files aren't deleted, it can instead just replicate the delta changes to the package, saving a lot of bandwidth and accelerating the deployment.