99% of the time the float position is one step further forward from the "down" position.
It takes off all hydraulic pressure from the "up" and "down" function so the bucket will float over the ground - hence the name. The curl function still works.
It can be used for backdragging and smoothing soil and/or gravel. Those that use it for snow removal (like in Alaska) prefer it since it allows the 4 wheels to stay on the ground for more bite when in 4WD. I've never done snow removal so take it for what it is worth.
Others with more experience will be around soon to elaborate.