To be honest, I couldn't really figure it out either. Might just try it...
Actually it seems like the URL translation feature in setup of 3.5 might do what you want (if it doesn't bother you too much to enter the old urls by hand ;-). It does, however, redirect you to the new URL, not show the new content under the old URL.
Virtual URL forwarding forwards from one virtual url to an existing virtual url. Example you want a shortcut "/faq" to the node "/documentation/faq" on your site. Then you use a virtual url.
System URL forwarding on the other hand forwards from a "nice" url to a system url (which typically consists of module name and some parameters). Example: Nice url "/about", system url: "/content/view/full/2". "Nice" urls are created automatically when you publish an object.
Here is some documentation about ezpublish urls: http://ez.no/ez_publish/documentation/ez_publish_basics/ez_publish_urls