When you're on your wireless network, it operates like a laptop would. Your phone and SMS still goes through your regular provider and is charged normally, but Safari, YouTube, Weather, Stocks, Maps, iTunes and any hacked games, etc - they're all using your regular network.
I use the phone for calls/SMS like a normal phone, and then Safari, Weather, Stocks and Maps when at home or work. It will also usually cache weather/stocks/maps data from the last point you were online so you can map out a route in Maps including directions ("Go 50m and then turn left") and access the cached info afterwards.
The maps stuff works pretty well. I can put in my home address, for example, and an address in Victor Harbor and it will find both and give me decent directions.