I believe what you stated is how it works.
There is another freeware program called rCE which works just like Microsoft's program.
rCE is very small, and simple to use.
http://www.freewareppc.com/communication/rce.shtml
With rCE, all you need to do is copy a tiny 11k file caled rCE.dll into your PPC \Windows folder.
Then execute 48K file rCE.exe on your desktop. Then once the desktop program is running, in the top menu bar select File > Connect, and your PPC will be displayed on your desktop.
I personally like rCE better than Microsoft's Remote Display.
You can also use rCE for doing quick screen captures to your PC clipboard by hitting ALT + Print Screen on your Desktop PC. Then you can just paste them into a program like Microsoft Paint or into a really great freeware PC graphics program called
Irfanview.
And you can use the rCE "Send Text" option to send text from PC based applications using clipboard (copy/paste) directly into PPC applications, like Notes, etc.