Correct - that is how markdown is used (text is wrapped in some symbols). If you put a "*" on either side, you get italics - if you do two "*" on either side, you get bold. There is a TON of other formatting functionality available - if you're interested, I provided a link in my OP.
The bottom line is that this is basically a standardized syntax format for enabling "rich text" formatting, in non-richtext entry boxes...
Thanks @TalonMan I was a bit confused by the word either, as I assumed it meant it could be on one side or the other, but in this case it seems like it needs to be on both sides for it to work.