To understand how blending works, think of a rolling ball. The entities you select to blend define the path of the ball. As the ball rolls, it removes anything in its path and adds material where necessary to create a smooth blend between the selected entities.

Blending uses a roll along and roll across method for creating a blend. This roll along and roll across method causes the blend to maintain the selected edges or continues the blend across the selected edges. Look at the following blend between two faces. In this example the blend radius causes the blend to extend over the edge of the face. The roll along and roll cross method causes the blend to roll along the edge of the face.