This is actually something I've wondered about quite a bit myself. I've always been fascinated with the biology of strange creatures, and when I first discovered Chrono Trigger, I couldn't help but analyze Lavos. Here are my thoughts on Lavos's structure and function:
I think the entirety of Lavos is one living being, albeit a rather odd and complexly-arranged one. The outer shell certainly serves as a "spaceship" of sorts, in that it protects Lavos during its long journey through space and its eventual entry into a planet's atmosphere and crust, but it seems to be a natural extension of the body, given its decidedly organic appearance. The shell seems to be unchanged from generation to generation if the Lavos spawns are any indication... Which makes sense, given that it already is designed perfectly for it's function.
The shell is mostly a protective layer. Oddly enough, the shell seems to be much, much larger than Lavos's actual body, and filled with twisting tunnels and passages. I assume this is to give the necessary protection to the vital body inside. Given that Lavos spends millenia floating in space (during which small metorites and such would eventually take their toll, stripping away the shell little by little), and causes an extremely violent impact when reaching a host planet, the gigantic, multilayered shell might be necessary to keep the body from becoming exposed.
Perhaps the tunnels inside are utilized for drawing in energy from the surrounding planet somehow. Lavos is said to do this, and the tunnel that the party in CT walk through leads directly to the core. These tunnels would most likely also be used for birthing the Lavos spawn, as well as for firing the "destruction rains from the heavens" attack used to destroy the surface of the host planet.
The shell's "head" seems to serve some sensory function, seeing as it appears to have an eye, and reacts to various stimuli.
The core chamber holds Lavos's "second form", which would appear to be the majority of Lavos's actual "body", as it were. This chamber also has many vein or tube like structures, again implying that Lavos's body pulls in energy from the outside. Interestingly enough, in the pre-release, the inner "chamber" in which you fight Lavos's second form has a decidedly artificial, mechanical look to it, but in the final it is much more organic-looking, complete with glowing "veins" and such. Maybe the former is simply because the detail for the latter hadn't been drawn yet, but it is intriguing.
The "third form" is a more difficult to explain. Whereas the "second form" is clearly inside the "first", it is unclear whether the "third" is a structure that existed inside the "second", whether the "second" transforms into the "third", or whether the "third" materializes when the "second" is destroyed. Regardless, this is the form that seems to process the DNA taken from the host planet's lifeforms.
