This is really more to do with process. As far as I can see the structure is as follows:

• Leads - Are individual contacts who may result in business
• Opportunities - Are actual deals in the pipeline ( which may have leads and contacts associated )
• Contacts - Are er... contacts
• Contracts - Represent opportunities that have closed favourably

I was a bit confused about this in the beginning but it does actually make sense - if a lead is converted and they are contacted again this would be a new lead with the source being "existing customer" and may result in another opportunity. Even with an existing customer the actual opportunity itself is new so therefore would be in the pipeline. I'm not sure if the details are stored in two places - haven't looked into it in enough detail - probably one for the Splendid team to answer.