Here’s a “real-world” scenario that might clarify the question/answer:
I have a MBP that I sometimes use with an old Canopus DV-to-s/video box connected to a 14-inch Sony monitor. It works fine when I’m on the go, but is limited to DV projects.
If I understand the manual correctly, I should be able to play anything (SD to HD) out of my firewire output and onto the screen. Is it “true HD” monitoring, no. But, if it works as I understand, it will be a handy little feature.