I printed these through a different printer (not Shutterfly), but I imagine the binding is the same.
With regular binding they look like this. The book doesn't quite open fully, and you can't quite see the part of the layout close to the bound edge:
With layflat the pages are like this. You see everything and the page sits flat when you open it:
I looooove the layflat option. You pay more for it, and the pages are on thicker board. This does make the spine thicker, but the end result is so much better.