[Halcyon]

No. It just means that if someone comes along and puts the next bid in then they will be the current higest bidder replacing you.

let's say there is an item at £2. I would put a bid of £5 so when the next person goes to bid £2.50, £3, or £4, you will still be the highest bidder upto the maximum bid you placed. So you might get the item at your original £2 but in case someone bids you have a chance with your maximum bid.
Ofcourse if the bidder goes over your £5 maximum then they are the leading highest bidder.