Yep that's a pretty accurate description of the Virtual Partner feature. I've got the 610 and actually used Virtual Partner to pace myself during the Berlin Marathon. Worked a treat. It constantly updates telling you how far ahead / behind you are of a theoretical runner at that constant pace.
I haven't actually used the Virtual Racer function yet but what you describe sounds right. E.g. if I wanted to race my against my Berlin performance in my next marathon I'd just upload that to the watch and race against it in my next marathon, in the same way as Virtual Partner. And you can upload other people's courses too.
I'm really happy with the 610 so far. It is expensive though, I picked mine up in the states for around £200, which made it a slightly easier decision...