The idea is that while the pan is heating, water droplets will either steam, bubble, evaporate BUT when at the ideal temperature it will semi-float accross the pan like a mercury bubble.  This is when it is the ideal point to place your meat/foods on the pan because like the water it'll just be right above the surface.

Watch the video and more at this other great site here.
http://www.houseboateats.com/2009/12/on-properly-heating-your-pan.html

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