Using an arm to move a hand is an example of forward kinematics. Using the hand to move the arm is an example of inverse kinematics. When you use freeform animation to animate a biped, you can use both kinds of kinematics.
By planting a hand or foot, you use another object (object space) or the world (world space) to control IK motion. In this method, the IK Blend parameter in the Key Info rollout determines how forward kinematics and inverse kinematics are blended to interpolate intermediate positions.