It's a little-understood (and poorly named) custom function. The D700 has the ability to sync. with flash in three different modes:
-Normal, in which the sync. speed is limited to 1/250th, the camera's highest normal sync. The shutter opens during the peak intensity phase of the flash burst.
-"1/250th FP", in which the camera will sync. normally up to 1/250th, and then switch to FP (rapid burst) to provide a nearly continuous, evenly integrated light for the entire duration of shutter travel, and used above 1/250th but drastically reducing distance range and increasing load on the flash unit.
-"1/320th FP", a little-known choice that most people gloss over, misunderstand, and is poorly named (imho - would have been better to be called 1/320th hedge sync.). At this setting, the timing of the flash burst is altered such that the camera can sync. at up to 1/320th second WITHOUT FP being used. The disadvantage is slight (approx one stop) loss of illumination, and some minor corner/edge darkening of the frame in some cases. It seems to be similar to one of the "hypersync" modes offered by Pocketwizard brand remotes.
Anyone use the 1/320th sec FP setting? Seems like a great way to get a little more shutter speed leeway when performing fill-flash with a telephoto lens and a moving subject that needs to be frozen (assuming the light loss and edge darkening isn't an issue).
Trivia fact for those who are familiar with the F5: it had a similar setting that allowed TTL flash sync. without resorting to FP mode up to 1/300th sec.