A:
It remembers what the device settings are for the current activity.
Example: Current activity is watch tv. Your TV is on, the cable box is on, the av receiver is on.
When you select the "play xbox" activity, it will (if programmed appropriately) change the tv input to the right input, turn off the cable box, switch inputs on the av reciever and turn on the xbox.
When you select off, it will then turn the tv off, the reciever off and the xbox...but it will know that the cable box is already off and not toggle the power