

In short, it will work exactly as if you were filling a rasterized version of your image in a bitmap editor like Photoshop or GIMP - but will give you a vector object to work with. This means that filling will stop at gradients, blurs, and even the color boundaries in imported bitmaps, but will ignore any paths or other objects that are fully (or almost fully) transparent or for any other reason do not stand out from the background. That is, when looking for the boundaries around the point you clicked, it takes for such boundaries any visible color changes. It is important to note that the tool's operation perceptual, not geometric. Being a vector tool, however, Inkscape's Paint Bucket actually creates a new path that "fills in" the area in which you clicked. The Bucket Fill Tool is simple - it fills in unfilled areas with color.
