vApp and Multiple Hosts

We are just experimenting with creating vApps, and this is looking a useful feature.

One thing I am not clear about ... the documentation states that:

The vApp metadata resides in the vCenter Server's database, so a vApp can be distributed across multiple ESX/ESXi hosts.

Does this mean that VMs running on multiple hosts can be included in the vApp? From trying out this feature, it appears not. We have multiple blade server hosts running within vCenter. If I drag a VM from "another" host into my vApp on "this" host, it appears that the VM is then running within this host. It looks like a vApp can only contain VMs running on one host. In fact, there might be anomalies if a vApp was split across multiple hosts, since one host might be running while another was shutdown, and the vApp would then not be able to start successfully.

Have I understood this correctly? Does the above statement perhaps refer to clusters?

Thanks

David