Fran... can you explain a little more about Auto Pitch Correction?

I have always thought this is like Auto-Tune... You sing, and the harmonizer corrects your pitch, either to the closest half-step, or to a specific scale.

But from reading the manual, I think it refers to correcting your pitch to a solo MIDI track, so you have to sing EXACTLY what the track does, in exactly the same rhythm, or bad things can happen. Do I have this right, or is there a way to allow you to sing freely, but still have pitch correction applied?