What does "when iMessage is unavailable" mean? In the settings for the iOS 5 Messages app there is an option to send messages as SMS "when iMessage is unavailable". Under what conditions is this the case? Is it merely the obvious (no data connection available or the iMessage server is down, or the message sits undelivered for a time), or is it more subtle (for example, the service simply not having had time to confirm that the recipient has iMessage enabled, or that the recipient's device cannot be contacted at the time of sending)? 

Phrased another way: what are the conditions under which an (intended) iMessage wold go undelivered, and are there other events that would cause a message to be delivered as an SMS?
It means either 


when the device is unable to determine if a message has been delivered over the iMessage transport successfully. When a successful delivery occurs you see a little 'Delivered' notification below the message in the history, and after a period you should have the option to resend as an SMS
or the recipient has no registration with the iMessage server to indicate that it could use the iMessage transport and will use SMS instead.