"Team building" means something different to everyone.  It's an ongoing process that helps a work group learn to trust and support one another and respect one another's individual differences while evolving into a cohesive unit. If done right it can help individuals release their creativity and see their role in a new way while having fun (which helps them remember what they learned). 

What is critical to the success of any team building exercise, or a company outing for that matter, is the follow-up. How do you translate the positive experience into something that can be used to increase harmony and productivity? Otherwise, it's just an expensive memory.