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It blanks the screen & stops it responding to key-presses. If you want to switch it off completely, there's a shutdown option under the 'advanced' menu, although it'll then take a minute or so to start up. One of the options in the custom firmware is to add this function to a key, for easier access.
AIUI, if not shutdown, then there is still power taken for the CPU, although at a lower level than required to process a page turn.
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