Yes, that is correct. That syntax is basically a "short if/then statement".
Basically, you could write it the same way by saying...
if ( isset( $error ) )
It does the same thing in the end; it's just a matter of how the statement is formatted.
The syntax of the shortened if statement goes as follows:
($variable)? "Variable is true!" : "Variable is false!";
where $variable can be anything from a simple variable to a complex expression in the same style as something in an if statement. The statement will return "Variable is true!" if $variable evaluates to true, and "Variable is false!" if $variable evaluates to false.
Generally this syntax is used in places such as this where you don't want to write a multi-line if/else block, and simply want either one phrase or the other returned.
Edit: on looking at it further, there was a syntax error in there.
Old: <?php echo (isset($error)? $error : ");?>
New: <?php echo (isset($error))? $error : "";?>
[edited by: WesleyC at 12:31 am (utc) on July 28, 2007]