Steve,
I have a calibrated Eizo monitor. The profile I have set within the photo mechanic preferences for icc profile if undetermined is set to the monitor profile that was created when I calibrated.
You should choose the profile you want assigned to images when they have no profile specified. In your case, sRGB would be a good choice, but for most, Adobe RGB would be the preferred choice. If you choose the profile that your monitor is currently using, then when an image has no specified profile (embedded or otherwise), color management will do nothing. The image will already be considered to be in the same color space as the output display and there will be nothing to do (from a color management perspective). Turning on or off color management will result in no visual difference for that image, both will look the same.
If your images have specified a profile then PM will perform color management from the profile specified by the image to your display's color profile when color management is turned on. When it is off, the image is not modified at all and the pixels are just drawn to the screen.
-Kirk