block function issue

Can someone remind me what the issue was with block functions? I remember it was compile-time vs. run-time, but I can't find it in the archives. I found one where it says {literal} tags didn't work right in a block function area, but it seems to work for me. Is it a matter of wanting to process the compiled template source between the blocks as opposed to processing the runtime output? How about examples of what the compile-time functionality is useful for? Thanks Monte