(here are the different paths the audio can take: to keep it simple: if its an audio call, it travels via IP from deskphone)
If you make an audio call via the Lync Phone Edition device dial pad, it makes the call directly from the desk phone via tcpip.
If you initiate an audio call from lync client with Lync Phone Edition as audio device, it is controlling the Lync Phone Edition and the call is going via tcpIP from Desk phone as well.
If you make a video call, the Lync 2010 client handles the audio/video and uses the Lync Phone Edition as a usb audio device.
If you make an audio call with the Lync Phone Edition, then bump the call up to a video call, it switches on the fly from IP to USB with no notice by the user.
If you make an audio call with the Lync Phone Edition, then bump the call up to a screen sharing session, the audio continues to flow from the desk phone via IP.
If the user in the phone and the lync client are different, the Lync Phone Edition is used as an audio device for the Lync Client. (if you unplug the usb, the call goes on hold)