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Float left

This is the first block-level element, flow is from top to bottom and elements are expanded over the complete width of the webpage
This is the second element which is floated to the left and still placed in the normal flow. We need to set a width for this element otherwise it fills up the whole width of the page (like now) which you probably don't want with an element which has a left float.
Finally, we have the third element which now is positioned at the space left by the second element.

So, now width a width (800px) set:

This is the first block-level element, flow is from top to bottom and elements are expanded over the complete width of the webpage
This is the second element which is floated to the left and still placed in the normal flow. We need to set a width for this element otherwise it fills up the whole width of the page (like above) which you probably don't want with an element which has a left float.
Finally, we have the third element which now is positioned at the space left by the second element. Now the previous element has a width set. If we have enough text you will see it moving it to the left underneath the previous element like these last words...