The BaseEntity property controls the inheritance of a given Entity. An Entity can inherit from another Entity, or it can inherit from a FlatRedBall type, like Sprite.
Inheriting from other Entities
For more information on inheriting from Entities, see the Entity Inheritance tutorial.
Inheriting from FlatRedBall Types
Entities can inherit from FlatRedBall types, such as Sprites. By default Entities inherit from PositionedObject, but this inheritance can be modified through Glue. The reason this feature exists is primarily to improve performance and reduce memory consumption.
For more information, see the Inheriting from FlatRedBall Types tutorial.