You've got an object floating in space and you'd like to move it from it's current location to the origin (0,0). So you activate the move command, select the object, select your basepoint, and type in 0,0, but nothing happens. The object stays put.
Dynamic Input (command: DYNMODE or F12) effects this behavior. When it is on and you type 0,0 for your displacement you're essentially telling the software to leave the object right where it is. But when it it toggled off and you type in 0,0 you are informing the software to move the object to the origin.