Lookup Formula: why does this work

In A previous post,

http://www.excelforum.com/excel-gene...ain-value.html

in which the OP was trying to find the maximum date (Col B) in which the value in Col A occurred, DonkeyOte used this formula as a possible solution

=LOOKUP(2,1/(Sheet1!$A$1:$A$100=$A1),Sheet1!$B$1:$B$100)

I understand the formula somewhat; 1/Sheet1!A1:A100=A1 will give either Infinity (or #DiV/0) or a 1. However, since the values in A are not in order (thus giving a search of something like 1, #DIV, # DIV, 1, ...) how would the formula know when the last value is? Does it go to the end and work backwards?

Thanks