When this happens, the Finder quits, and the background image disappears. It relaunches itself after a few seconds. The Dock The Dock now arranges things for you. The trash is on the far right. Then come documents that you minimize, including Finder windows, and then a separator.
Applications come next.
As you can see from the picture, now only the icons magnify instead of the icons and their backing. In addition, you can only click on the icons, not on the backing. Since most icons don't extend all the way to the bottom of the dock, this means that you cannot wantonly fling your mouse to the bottom of the screen to click on the icons like you can with menus. The Help files claim you can drag and drop a file on an application in the Dock to open it with that application. Apple's Help claims that you can drag them to the dock from the Finder, but I could not get this to work.