Summary and Info:
Running pacman with a Ignorepkg=<package> will prompt weather or not you want to install that updated package (I assume only if there is an update) However, with the option -w added, it will not prompt, and try to install the latest.

I was trying to get a ppc install of arch in a folder so that I could put it on my wii, Glibc was over-updated(?) and was requiring linux-api-headers 3.2 while the repos only had 3.1.6, I got a version of glibc from a previous attempt at trying this (It was for 3.1.6). I was trying to make it so that if the setup failed I wouldn't have to re download the cache (the -w option), It kept trying to update Glibc regardless of Noupgrade=glibc and Ignorepkg=glibc set in the pacman.conf. However, without the -w option, it questions weather you want to update it, and will then proceed.

Steps to Reproduce:
Get version of a package that's not the newest and has a missing dependency (or over-updated), pacman -Syw <package>, it will give: warning: cannot resolve <dependency package>, a dependency of <package>. However without the -w option, it will prompt if you want to update it.