The role of defects in phase transitions is an important subject, especially in systems of low dimensionality. The two-dimensional system Sn/Ge(111)-(root3 x root3)R30degrees is an excellent example. The surface undergoes a gradual (root3- x root3) to (3 x 3) phase transition upon cooling, and much debate has arisen over the exact physical mechanism responsible for the transition. Concepts such as Fermi surface nesting, charge density waves, Jahn-Teller distortions, metal-insulator fluctuations, and soft phonons have been invoked to explain the experimental findings, and there is now a growing understanding that substitutional Ge defects play an important role. A brief historical overview is presented of the work done on the Sn/Ge(111) system and of the different reported explanations of the phase transition. An extensive discussion of the phase-transition mechanism, and of the role played by defects, is provided. It is argued that the transition should be classified as displacive-like rather than order-disorder-like, but that defects obscure a clear distinction. The definitive experiments to test this conclusion are suggested. (C) 2002 Elsevier Science Ltd. All rights reserved.