From a cabling standpoint DP Alt Mode will have similar allowances and limitations as USB over Type-C since it inherits the physical layer. DisplayPort 1.3’s HBR3 mode will be supported, but like USB’s Superspeed+ (10Gbps) mode this is officially only specified to work on cables up to 1M in length. Meanwhile at up to 2M in length DisplayPort 1.2’s HBR2 mode can be used. Meanwhile DP Alt Mode is currently only defined to work on passive USB cables, with the VESA seemingly picking their words carefully on the use of “currently.”
Because of the flexibility offered through the DP Alt Mode, the VESA and USB-IF have a wide range of options and ideas for how to make use of this functionality, with these ideas ultimately converging on a USB/DisplayPort ecosystem. With the ability to carry video data over USB, this allows for devices that make use of both in a fashion similar to Thunderbolt or DockPort, but with the greater advantage of the closer cooperation of the USB-IF and the superior Type-C physical layer.
At its most basic level, DP Alt Mode means that device manufacturers would no longer need to put dedicated display ports (whether DisplayPort, VGA, or HDMI) on their devices, and could instead fill out their devices entirely with USB ports for all digital I/O. This would be a massive boon to Ultrabooks and tablets, where the former only has a limited amount of space for ports and the latter frequently only has one port at all. To that end there will even be a forthcoming identification mark (similar to DP++) that will be used to identify Type-C ports that are DP Alt Mode capable, to help consumers identify which ports they can plug their displays into. The MUX concept is rather simple for hardware but I do get the impression that devices with multiple Type-C ports will only enable it on a fraction of their ports, hence the need for a logo for consumers to identify these ports. But we’ll have to see what shipping devices are like.