Verification means that the user has done some things that tell airbnb that they are who they say they are. Once I had a verified guest request to stay with me, and when I looked the guest up on google they had a significant criminal history. So verification does not mean that they are not former felons or whatever else you might expect verification to mean. It just means that their drivers license, facebook account, phone #, and/or email match up - that if "Donald Duck" is requesting a room, then "Donald Duck" shows up at your door.
If a guest has not been verified, you can pre-approve them. If they do not complete the verification process within 24 hours, then their request would be denied or cancelled - they would not receive your address or contact information. If you pre-approve the guest and they do complete the verification process, then once it is complete they will have the opportunity to book a room and get the details for the booking - but not until then, as long as in your settings you require verification.
During that verification period, the time on your calendar would show up as blocked out (whatever dates they have requested), so no other guests would be able to book the same time period. If the guest doesn't complete verification, the dates return to your calendar. If they do, the grey line will turn to a colored line with their picture and name on it.
