Wow, this makes perfect sense to me now (thanks to your easy to understand explanation).In manual mode you have all 3 settings (ISO aperture and shutter speed) under your direct control - thus the meter is no longer the exposure your trying to meet, but the exposure your going to get from the settings you have.
edit - ETTL is auto flash metering - the flash will auto meter the scene with a preflash (taken right before the shot but after you press the shutter) and then adjusts the power to meet a correct exposure based on the settings dialed into the camera.
So, using ETTL pretty much takes the guesswork out of it huh? Is it pretty spot on most of the time? When wouldn't you want to use it?