The starter family is an option given at the start of a C3 or DS game, where instead of hatching eggs, you are given the option to start with a pair of pre-trained adult norns.
The two parent Norns were automatically created during the self test. They were aged, taught all vocabulary, and allowed to walk round and play for a while. They were also encouraged to be friendly with each other so they would breed more easily on the players' machines. After this quick introduction to life, they were exported. The build script then copied them from the Program Files directory back to the build image.
The script does some extra checks at this stage. For example, it ensures that the female starter Norn doesn't actually get pregnant! 
An explanation of the PRAY code behind the starter family can be seen at The Realm.