Correct, list select on the left, then outside the form, an evaluation is done to build a URL for the iframe to load. when the datastream returns to the form, the iframe loads whatever URL was built in the model.
There are some notes, such as, if your list is tall enough to scroll, you'll want to return to the previous scroll position when you return to the form. You'll want to load the first item in the list select's array into the iframe on initial load, things like that.