Mainly it means you can play video without a lot of rendering. Most NLEs will play realtime. Factors that affect that are the choice of your edit codec (DV or DVCProHD for instance), the speed of your edit computer, and the speed of the hard drives storing the video files. If you search the Cow, you'll find more threads than you'll want to read about suggested edit systems.
MacPro 8-core 2.8GHz 8 GB RAM OS 10.5.5 QT7.5.5 Kona 3 Dual Cinema 23 ATI Radeon HD 3870, 24" TV-Logic Monitor, ATTO ExpressSAS R380 RAID Adapter, PDE enclosure with 8-drive 6TB RAID 5
FCS 2 (FCP 6.0.5, Comp 3.0.5, DVDSP 4.2.1, Color 1.0.3)
Pro Tools HD w SYNC IO, Yamaha DM1000, Millennia Media HV-3C, Neumann U87, Schoeps Mk41 mics, Genelec Monitors, PrimaLT ISDN