That is for solo minning. When you solo mine, your miner ask the bitcoin client what work it should do. In slush's pool, your miner ask Slush's server what work to do (as far as I know)
This appears to be correct. Both CPU and GPU miners are reporting hash/s and no errors when connecting to mining.bitcoin.cz, so I'm assuming that it is working correctly. In 7 minutes, I got two shares, but also two that were not accepted. The GPU miner had a "trouble communicating to RPC server" message twice, whereas the CPU miner has had two Result FOUND:xxxx Not Accepted messages on it.
I'm really hoping that this is true, because that means I wouldn't have to wait for the block history to download on my machines before I start to mine with the pool!