This information is from Durin, originally posted on AudioMasters.
Automation has 5 different modes:
1. OFF - ignores any of the automation parameters for that track
2. READ - process automation data for all parameters for that track. During playback, each parameter that contains automation data is adjusted to match that data.
3. WRITE - overwrites any existing automation data under the playback cursor, unless that automation lane has been made "Safe During Write." For example: You have manually click some Mute on/off points, and in Write mode, attempt to record some Volume fades. If the playback section occurs where Mute nodes existed, they will be overwritten by whatever status Mute happens to be in at the time playback was started. If you click the "Safe During Write" button on the Mute lane, this lane will act as if it were in READ mode while you are writing the Volume data.
4. LATCH - does not overwrite any existing automation data UNTIL you make a change to the parameter, at which point it "latches" on to the new value until you make additional changes or stop playback. Upon stopping playback, it writes a final node and draws the envelope between that point and the next pre-existing node. If no pre-existing nodes exist, the parameter remains at this level for the rest of the session.
5. TOUCH - does not overwrite any existing automation data UNTIL you make a change to the parameter, at which point it gradually moves back to the level it was at before the change was made. For example: Track 1 Volume is set to +1dB with no automation data. In touch mode, if I drop the volume to -3dB during playback, when I take my finger off the knob (or release the mouse button) the volume level will linearly rise back to 1dB. (The time in which the return to the pre-existing parameter level occurs is modifiable. Click Edit > Preferences > MultiTrack and edit the Automatch Time setting. You can also modify the thinning parameters to reduce the number of edit point nodes captured per second.)
I hope that helps some.