The nice thing about the Harmonys is that you can do either. I believe its very similar to the 688 from the aspect that they (Logitech) have pre-assigned options for each button according to the manufacturer of the device you're attempting to control. So, when you connect it to your PC via USB cable, you can either download the Logitech Harmony software onto your machine or use the online setup to configure your remote with your devices. In doing so, you'll define what components you're going to use in your setup, then they will automatically assign the canned functions for these devices.
As I noted above, the remote will have predefined options for each button, but regardless whether you use the downloaded client software or the online software, you can go in and customize these to different options if you prefer as well as set up macros to perform multiple button touch functions to a single button touch. These are really quite flexible and the GUI interface on your computer makes it very simple to understand... -TD