Breed slots are used by the game to distinguish one breed of creature from the other. Only one breed can be assigned to each slot. If multiple breeds share a single slot, the last breed to be installed will overwrite the sprite set files for the other breeds in the same slot, and will be the only breed displayed in the game.
In Creatures 1, there are ten breed slots available for each species (or category of creature), numbered from 0 to 9. In Creatures 2 and Creatures 3, there are 26 slots for each species, ranging from A to Z, or 104 slots total. Docking Station and Creatures 3 share the same breed slots.
Genetic breeds don't have, or need, breed slots. They will use the sprites of a previously existing breed.