I get the simple stuff but I don't get the "- | (...)" and the "tar xf -)" parts.
The "-f" option is used to tell tar where to write or read a tar file; "-" means standard output when creating a tar file and standard input when extracting a tar file. The default is to create tar files on standard output and read tar files from standard input, so the "-f -" options not needed.
tar -c ... | (cd /tmp/package ; tar -x ...)
creates a tar file on standard output where it is piped into subshell that executes a tar extraction process within the directory /tmp/package. I believe that that is equivalent to
tar -c ... | tar -x -C /tmp/package ...
You can also do things like
tar -c ... | ssh tc@somewhere.else tar -x -C /tmp/package
transfer files from one machine to the directory /tmp/package on a remote machine. (Rsync can also transfer files over an ssh link.)