The Algo switching works like this:

You tell the pool, with password options, which algos you want. For your miner only 1 line in your pool list will be reachable. You should have no other pools than starpool in your list.

Lets say skein is the most profitable algo, then all other algos wont be reachable by your miner. So its mining on skein.
If skein is not the most profitable anymore, but quark, then the pool will not be reachable for skein anymore. But now its reachable at quark algo. So your miner switch to the next line in your pool list. Is the next line not quark but myr-gr, it will not be reachable also. Next line in your pool list is quark... and its reachable. So miner is working on quark now.

Quark not most profitable algo anymore: Pool will not answer for your quark line anymore. Miner switch to your next line. Is it correct algo, pool will answer and provide data. If its not correct Algo, pool wont answer and miner jumps to next pool line.

I hope I am right with this... Any other opinions? Please correct me if I'm wrong.