In the Europe I know, "sabbatical" means unpaid time off (commonly 6 months) while staying with the company. You don't get paid and don't accrue holidays/other benefits, but continue right where you left off when you're back.

I think option for this is required by law in some countries, though I've never taken it so I'm not exactly sure.

My former company allowed this after two years of continuous employment to let employees try their wings with building their own product. I thought this was pretty cool, and definitely a recruitment carrot. On the downside (for the company) lots of those colleagues ended up leaving after their sabbatical was up, but I figure that those people would have left soonish anyway. It's not like they would've had a problem getting a new job.