To see how auto-arranging works, consider a grid size of 3 x 3. With 2 or 3 windows open, they will be tiled vertically. When the user opens up a fourth file, they will be displayed in a 2 x 2 grid (as in the image below). When a user opens up a fifth and sixth file, the first 3 files will be displayed on the top and the remaining 2 (or 3) files will be displayed on the bottom. If the user opens up a seventh file, V will display the files in 3 rows of windows. The first 2 rows will contain 3 windows each, and the third will contain the seventh file. The eighth and ninth file will also be displayed on the 3rd row.
Because the grid size is only 3 x 3, the automatic arranging will stop with the ninth file. Should the user open up a tenth file, it will be displayed in a normal overlapping window.