It's been my experience that it does seem to quiet down some exhaust, while on others it just directs the loudness towards the rear of the car. In most cases it's going to seem like it's quieter, although that's just because the sound isn't directly under the driver anymore and is behind the car. As for how it sounds, in most cases you're going to get a less rumbly/bassy sound even if it still is rumbly and deep with the tail pipes (i guess you need to have ran both dumps and tailpipes to understand).
I think straight through race style mufflers sound better with tail pipes, while chambered mufflers *sometimes* sound better dumped. I will say this though...i've never heard a muffler that sounded worse WITH tail pipes, but i've heard a lot that sound like total crap dumped.