I tried to find some information in the manual pertaining to how the Assigned to: function works when creating a post, perhaps you can answer these questions or point me to the correct page in the manual?

When creating a new post/page... item.. at the bottom one can set Workflow properties such as
Priority:
Assigned to:
Task status:
Deadline:

my questions:

1) what does it affect when assigning a member to an item, is this purely for back office only?
2) a user MUST be a member to be assigned, if a user is a member but has no other privileges (You are here: Dashboard > Blog > Settings > User permissions) , does assigning a member give the assignee any other privileges?