It's not confusing, it does the exact same thing it's always done since the 1980s. The zoom button in Windows is horribly broken though - all it ever does is make the window fill the whole screen! How wasteful!...
Considering the number of complaints though, you'd think Apple would introduce a preference setting, or another button or something. And in fact they have - in 10.7 there's a maximize button in the top right corner...
Except the new button is officially called the "fullscreen" button and to hear some people talk, the existence of the fullscreen mode is a foreboding sign of the coming iPad-ification of OS X...
sigh.
