there is a similar question to this one How does the automatic brightness settings work?
however, I do not think it answers my question. This is more to do with the UI.
I just got myself a Galaxy s3. The phone has under the notifications the ability to change the brightness.
As can be seen from the screenshot, I can both adjust the brightness manually and select auto. Adjusting the brightness manually does visually affect the brightness of the screen even when the autobrightness is checked.
So what does the manual adjuster do when auto-brightness is turned on?