These options are usually referred to as match any, match all, and exact phrase searching. Obviously, search engines using different methods will return different results for the same query. Suppose you want information on the upcoming presidential elections. You might search for President Election 2000. If you use Lycos, which defaults to a match all search, you'll find only sites that contain all three words - a more manageable list of results.
All search engines rank results by relevance.
If you perform a match any search, the sites listed first will be those containing all of your search terms, so you're still likely to find the sites you're looking for. Even so, it's useful to know what the search engine is looking for, so you can use more or fewer search terms to focus your search most effectively.