Jarema has most of it, but there seems to be some confusion on a few points.

Here's the O.E.D. :

1Built half of timber.

1842-76 Gwilt Archit. Gloss., Half timber building, a structure formed of studding, with sills, lintels, struts and braces, sometimes filled in with brickwork and plastered over on both sides.

1874 Parker Goth. Archit. i. i. 10 Half-timber houses..of which the foundations and the ground-floors only are of stone, and the upper part of wood.

2. Made of timber split in half.
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This last definition is new to me, and I believe that the most common sense is that of no. 1 --for the simple reason that it is nearly impossible to build a house from "timbers" which are, literally, "split in half".

The process of building such a house explains the term :

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Note added at 2003-07-01 14:38:09 (GMT)
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Trees are felled, preferably in winter, when their sap is down and they contain less water (and would therefore dry faster and shrink less), and they are trimmed and cut into logs.

The logs *can* be sawn (traditionally in a \"saw pit\", much later, at a saw \"mill\", attached to a grain mill) but this is a quite laborious process and, wherever possible (only with straightgrained, relatively \"clear\" --knotless-- timber), splitting or \"riving\" was the prefered method.

The log could be riven --using wedges and \"beetles\" (huge mallets)-- several times, if the tree was large enough, until the rough size of the piece of timber desired was reached.

The timber was then \"squared up\" to the precise size needed, by marking lines (with a gooseberry-soaked string or \"chalk line\") on the face of the wood, then using a \"broad axe\" (very large, with a perfectly flat bottom face) to remove the excess wood and yield a relatively smooth, flat surface, \"hewn to the line\", as they say.

When all four sides of the timber were \"squared\" the timber was cut to the precise length needed, the necessary joint-member (usally some sort of tenon\") was cut on the ends and any mortices needed for intervening lesser timbers in its length were cut in the appropriate faces.

The timber was then \"joined\" to the other timbers of the future wall (say), on the ground (or the floor of the second floor, if it was a second story wall), all the tenons were \"driven home\" in their mortices and \"pegged\" secure with a large wooden peg (a \"treenail\").

Frequently, especially in Late Medieval houses (esp. in Kent), *curved* timbers (riven from the larger branches of the tree, retaining their natural shapes) were used in the minor timbers, which provided both extra strenght and also a quite pleasing decorative effect, when the exterior faces of the timbering was left exposed.

When the whole wall was fully assembled it would be moved to the appropriate \"sill\" and \"raised\" --in a very large building (like a barn) the latter could require the help of a large number of men (hence the term \"barn raising\", which was a great communal event in all agrarian societies).

Once all the walls, floors, and roof were assembled and in place the interstices between the timbers were filled in. Although brick or small stones could be (and was) used, the most economical and traditional filling was \"wattle and daub\" (\"interwoven twigs plastered with clay or mud, as a building material for huts, cottages, etc.\").

Not to contradict the OED, but the interwoven \"twigs\" were actually *filled in* with the clay or mud, which also provided a rather good insulation in the wall, as well.

Traditionally the interior was plastered --though (in more expensive houses) it could be covered with wood, either wholly (\"paneling\") or in part (\"wainscoting\").

The exterior could be finished in a variety of ways : the interstices between the large timbers could be plastered, or stuccoed, and then painted ; or the whole exterior (major timbers and all) could be covered with a local material, say, slate (i\'ve seen medieval houses in Angers like this) or relatively thin, long strips of wood (\"clapboards\"), which were intially \"riven\" (yielding a triangular transverse section, useful in their overlapping), then planed smooth and, sometimes, given a decorative \"bead\" on their bottom exterior edge, \"for show\".

This latter solution was particularly popular in the timber-rich areas of New England in the 17th and 18th centuries, where we find houses which are, essentially, *identical* in their half-timber construction to those built in the (late medieval) tradition \"at home\" in England, but which are covered on the outside with clapboards (later called \"clabbording\", in Southern Indiana), hiding their beautiful timber joinery.

This type of construction, which was quite sound and durable, but which was also *very* labor intensive, persisted in house building in the U.S. until the 19th century, when mechanized saw mills (originally driven by water, then by steam, finally by electricity or gasoline) made the mass production of standarized, uniform \"timbers\" (esp. \"2x4s\") possible, at which time a new kind of \"framing\" (\"baloon framing\") came into vogue.

Virtually all modern houses built of wood are \"baloon framed\", a cheap, fast method of construction requiring relatively little skilled labor which, nowadaze, usually results in a proliferation of ticky-tacky, characterless matchboxes strung out across the landscape in \"Pressboard Estates\" (at least in \"The Simpsons\").

But, that\'s part of another question, i suppose.

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Note added at 2003-07-05 19:02:56 (GMT) Post-grading
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I\'ve modified the definition a bit :
\"A house (or part of one) \'built half of timber\', with the timber framing exposed on the exterior.\"
Though the houses of 17th c. New England are essentially *identical* in framing construction to their late medieval predecessors, they probably shouldn\'t be called \"half-timber houses\", since their construction is hidden by the clapboard siding of the exterior.
In common usage, the term is usually only applied to houses with their timber framing exposed and visible on the exterior --no matter what the \"filling\" in between might be.
This causes some difficulty, as, in France and elsewhere, the current custom frequently is to strip off the (usually stucco) covering of these houses, in order to expose the \"rustic\" timber framing, thus transforming an \"ordinary\" house into a \"half-timber\" one.
Then there\'s the practice of adding *fake* \"timbering\" (complete with a transparently bogus \"hand-hewn\" texture) to the exterior of *new* construction, which apparently is sufficient to fool the majority of fast-moving tourists passing by on their busses.