Peachesbackwards

I'd appreciate if someone could clarify the following on Power Options in regards to laptops as I'm a bit confused:

A. Laptop is plugged in using power adapter.

I'm assuming as the Laptop is plugged into the walls electricity the power Option setting makes no difference in the laptops operation or rechargiing the battery. Is that correct? If not, what exactly is being affected?

B. Laptop is being used by Battery.

Obviously the less power used, makes the battery run longer before it is recharged. But how exactly does less power affect the laptops operations, specifically in regards to basic stuff like the Internet, downloading, burning &
multitasking?

Thanks for your help.