What does maintenance mode do? What does maintenance mode actually do?  I'm not asking for a high level overview, nor am I asking for a code dump.  I'm asking for a technical, functional definition.  What does maintenance mode actually do?  Does it shut down everything for all users except admin and just show them a static page?
Is there a technical reference (short of the code itself) that covers what maintenance mode actually does?
The main functionality of maintenance mode is that it allows the site to use the theme system without requiring the database.

It does almost exactly what you had guessed, it locks out all users that do not have the 'use site in maintenance mode' permissions or administrator roles.  A site in maintenance mode will use a different template file than the live site, normally maintenance-page.tpl.php. 

Maintenance mode also kicks in in other situations:


Site installation
Updates
Any time the database fails