With batch oriented text processing systems such as TeX, writing WYSIWYG editors is somewhat complicated since the editor would have to start a complete formatter run for every change done. For large files, this means that the system would take quite some time to display the changes.
WysiTeX has the ability to remember the complete state of TeX execution at arbitrary points (actually, only when you're in vertical mode). Whenever a page has been shipped out, or an input file has been read, WysiTeX remembers its state at the next possible occasion.
When you change text in WysiTeX's input, the last snapshot preceding this change is taken as the starting point for formatting. Since your input up to this point has not changed, it is safe to do so.
Caveat: When incremental formatting is used, writing to external files may not work as you expect, since the contents of these files is not part of WysiTeX's state. Therefore, the Configuration Window allows you to switch off incremental formatting for those situations where you need to write external files.