the picture could do either of the following:
1) mirror your screen. this is fine if you're going to watch downloaded movies fullscreen without using the computer.
2.) screen spanning. this is the dual desktop. you just drag VLC or itunes onto the big screen and you can watch full screen on that TV while being able to surf the internet and use the other desktop without disturbing the movie or show. but itunes covers the laptop desktop with a black screen.
i don't know if itunes will block out the desktop when fullscreen. i know when i have parties, i hook my laptop up to my hdtv, then put on itunes visualizer fullscreen. this way i get nice music from surround sound and SWEET ambiance.