This command (also available from Command Mode) toggles between the normal display mode and a mode in which the amount of output characters is minimized. This mainly affects the way Command Mode works. In standard mode (MODEM = OFF) the entire screen is cleared and repainted when switching between Display and Command Modes. When MODEM = ON, only the top one or two lines of the screen are used for Command Mode, leaving the rest of the Display Mode screen display intact. This abbreviated command mode is particularly appreciated by modem (or other slow baud rate) users, as well as people who tend to forget what they were doing when the screen is suddenly cleared.
Note that this (MODEM=ON) behavior is similar to the venerable Unix editor vi, except that vi uses the bottom line for command mode.