The following is from another blog I previously contributed to, the now defunct bangkokfood.blogspot.com. I thought I'd reprint a few of the relevant entries.
Plastic Baggin' It
This isn't a sexy post. This isn't a post about the best Thai food there is to be had. Rather, it is a look at a popular way to grab a complete meal with minimal effort and money.
To understand the phenonenon of bag food, and the prevalence of street food for that matter, it needs to be mentioned that Thai people by and large do not cook much. When it is time to eat most Thais hit the streets for a meal. Often times though, rather than sweating in the street while eating one's fill, the food is brought back home. The vehicle for transporting food is the ubiquitous plastic bag. In fact in order to ask for your food "to go" in Thai you say "with a bag;" sometimes they'll even give you two. There is also an entire class of food which is made specifically to be bagged.
Bag food is the cheapest of the cheap. I'm not talking about your average cooked to order food which is then put in a bag to take home. Bag food is even cheaper and faster than fast food. Basically the way it works is somebody's grandma cooks up a few pots of this or that, scoops it into bags and sits on the street selling them for 10 baht a pop. The menu changes daily and the average Thai person in the neighborhood merely waltzes up, takes a look at what there is and 40 baht later has a complete meal for the family.
Sometimes the food is prebagged, but sometimes it is more of a pick and point scenario. The most common bag foods are stirfries and curries with the occasional soup or yam (thai "salad") thrown in for variety. It is basically the most typical Thai food. Bag food varies greatly in quality, so it is important to know your bag lady!