EhEh.. It's "virtual", that's why it is hard to explain.Wikipedia's definition
is also quite useless.
Curt: virtual desktops have nothing to do with the option you mentioned that you tried. That's "active desktop". That's useless, but virtual desktops are very useful.
To better explain this concept, take a look at the image i posted above, the second one with 4 desktops. That's how it works. Notice that on the top-left, there are several windows, and in the others, there are none.
This way, i could have for example: internet explorer on the top-left desktop, msn messenger windows on the top-right desktop, winamp on the bottom-left desktop and another program in the bottom-left desktop.
The advantage? When i am in one of the desktops, i don't see the windows present on the other desktops. This way, they don't interfeer with what i'm doing in that desktop.
This kind of programs help you reduce the clutter in your desktop, byt dividing the stuff you have in one, by several of them.
To switch between desktops, you just press a key (for example, windows + right arrow to go from desktop1 to desktop2) or just bump the mouse against the edge of the screen.
Do you understand what i mean?