in simplest terms think of it in the same way as riding a pushbike. You change down a gear and you pedal quicker to get the same sort of speed.
The main difference that with a 16T instead of a 17T everything is a bit quicker (apart from top end) The bike will feel like it's spinning up quicker, and will accellerate a bit quicker. The top end will not be as high, but you often find with bikes they are geared to get to the top end pretty slowly (relativly speaking) So you end up with about the same top end speed because you can actually rev to the red line easier in all gears.
There are down sides, you use more fuel. Your speedo will be wrong (not the SD though as the speedo runs off the front wheel) and it's a litlle more 'flighty' with the front end being a bit lighter.
People say it also solves a few fuelling glitches on the SD, however i've not seen the issues they talk about TBH.