When rebuilding an index, there is an option for ONLINE=OFF and ONLINE=ON. I know that when ONLINE mode is on, it makes a copy of the index, switches new queries to utilizing it, and then rebuilds the original index, tracking changes using versioning to both (correct me if I am wrong).
But what does SQL do in OFFLINE mode?
In ONLINE mode the new index is built while the old index is accessible to reads and writes. any update on the old index will also get applied to the new index. An antimatter column is used to track possible conflicts between the updates and the rebuild (ie. delete of a row which was not yet copied). See Online Index Operations. When the process is completed the table is locked for a brief period and the new index replaces the old index. If the index contains LOB columns, ONLINE operations are not supported in SQL Server 2005/2008/R2.
In OFFLINE mode the table is locked upfront for any read or write, and then the new index gets built from the old index, while holding a lock on the table. No read or write operation is permitted on the table while the index is being rebuilt. Only when the operation is done is the lock on the table released and reads and writes are allowed again.
Note that in SQL Server 2012 the restriction on LOBs was lifted, see Online Index Operations for indexes containing LOB columns.