The work plane target is the object that the snap grid should be aligned to. The work plane is the grid itself and its coordinate system will match the object you choose, but the plane can be picked up and moved like any other object. The snap distance is the distance between units on the grid. If you choose 1 meter you can only position your object at 1 meter intervals from the origin of the plane, on the axes you have selected. Personally, I only use the snapping when I'm doing something with scripting where I need things to be positioned exactly. If I'm building a track, I'm only concerned with things being visually good enough.
I recorded a video of some snapping operations since I was already recording a video for a thread I'm posting.
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