You know, I was actually thinking about this while showering before work. I know, I'm weird.
Here's what I came up with, near as I can tell. What we're looking at is a unusual cascading gain stage, with a gain control for both parts. The first one is your usual preamp cascaiding gain stage, where a signal is overdriven in one tube (or side of a tube, i think, they're split, right?) and then pumped back into another distored preamp tube to increase the level of overdrive even more. This is normal for a high gain amp, as my understanding goes. Here's the tricky bit, though. What happens now is that it goes into a third "gain stage," but this one is engineered to be as clean as possible. What it's responsible for is taking a quiet signal coming out of the preamp stage (i.e- one with a low preamp gain level) and boosting the overall volume of that signal up to a "hotter" signal, without drastically varying the gain structure, before it hits the power amp section, so the signal will be driven just as hard into the tubes as a heavily distorted (and in turn louder) preamp signal. However, because the signal is engineered to be as clean as possible, there's very little change in overall "gain." From there, it goes into a normal poweramp section.
Does this configuration simlate lower-powered amps when you have the master down and the channel level up? Of course not. Pure marketing hype. It just makes it easier to balance tones between the channels, and get earlier power-amp distortion out of low-gain settings (you don;t have to turn it up as far, but the overall loudness out to be about the same), and allows you to get more poweramp gain overall when you really push the thing.
Just a hunch, of course.
Micro- i tried setting my lead channel with the prescense all the way back, and compensated a bit with the treble, on my TSL last night when the parents were out... Man. It "feels" different- so much spongier, much more like a Mesa. And it seems somehow warmer, too, even at moderate levels (VPR (25 watt mode) on, master at 3-4). I like.
It's not as forward and agressive sounding, so if i was playing speed metal or something maybe I wouldn't like it as much, but even for shred-style lead i was really digging the tones I got with the prescense all the way back. I don't know if it bypassed it or not, but....