Here's a description of Low Latency Mode From the Logic 9 Manual. which is more complete than the Logic X manual
Low Latency Mode checkbox and Limit slider: You need to select the Low Latency Mode checkbox in order to activate Low Latency mode and use the Limit slider. The Limit slider lets you determine a maximum amount of allowable delay that can be caused by plug-ins when Low Latency mode is enabled (by clicking the Low Latency Mode button on the Transport bar). In Low Latency mode, plug-ins are bypassed to ensure that all delays (across the entire signal flow of the current track) remain under the Limit slider value. This is useful when you want to play a software instrument with several latency-inducing plug-ins inserted in the channel. For more information, see Working in Low Latency Mode
Low Latency mode allows you to limit the maximum delay time caused by plug-ins. Plug-ins will be bypassed to ensure that the maximum delay that can occur across the entire signal flow (of the current track) remains under the chosen value. The Low Latency mode is extremely useful when you need to play a software instrument (or to monitor through an audio channel) when plug-ins with high latencies are already in use—at any point in the signal flow for the selected track/channel.
The main purpose of Low Latency mode is to disable high latency plugins when recording tracks using AU (Virtual) Instruments, this is so the recording is placed more accurately in the timeline. Low Latency Mode is not really for general use, here's why:
1. If you don't have any Latency inducing plugins in your mix it does nothing at all, I don't know if it has any adverse effects best to leave it off.
2. If you DO have latency inducing plugins, they turn orange with Low Latency Mode enabled and they effect your mix.
