It means that Leopard basically exists as two OS's - one 32-bit and one 64-bt. But the installer on the retail DVD will handle the installation of the appropriate version based on the hardware it detects. And on 64-bit machines, it will install duplicate versions of libraries, drivers and such to allow both 64-bit and 32-bit code to run (although only one version of the MACH kernel will be installed - all of this is just like Tiger already is, it's just that Leopard will complete the 64-bit side, while Tiger was not fully transitioned on that part of things). In this sense, Leopard really is merely evolutionary, not revolutionary (as engadget or somebody put it) - Leopard is just completing a transition that Tiger started.

IF - your machine has a 64-bit cpu and architecture, then you will be able to run and compile both 32-bit code and 64-bit code

IF - your machine has a 32-bit cpu and architecture, then you will only be able to run and compile 32-bit code (I'd assume, though do not know, that the version of the developer code that ships with Leopard will install gcc with the appropriate default switches - which of course you can always override anyway).

There will be no performance hit running on a 32-bit machine, as you will be running native 32-bit code.

And note that 64-bit does not automatically mean faster code. There are actually instances where certain types of apps (eg. database search apps) may even run slower in 64-bit then in 32-bit as long as they do not have memory requirements beyond 4GB. The reason being that a 64-bit version of an app loads with inherently greater overhead then the same application compiled in with 32-bit optimization. If the app needs or can make use of memory beyond 4GB, then certainly 64-bit has a great advantage, but it's really mainly in the ability to use more memory that 64-bit really shows an improvement in performance.

So your typical uses of things like web browsers, word processors, and such run no faster in 64-bit then they do in 32-bit. And on a 64-bit machine with 4GB of RAM or less, you may actually want to use a 32-bit optimized application and avoid the unnecessary overhead of loading up a 64-bit version of the same app.