What is a Jira 'context'? What is the 'on the fly' context?
The documentation explains it as a set of issues, but that is not the only thing it is. Some contexts have exactly the same issues but I can do something in one context (such as prioritization) that I cannot do in another.
A context is a bundle of settings. Among the settings in the such bundle are
Filters (for example I have a context "To Be Estimated" which filters out everything which should not be estimated (bugs), is already estimated or is not ready for estimation (not clear enough).
Sorting: Only when sorting is done by a rank column you can use the Context for prioritizing issues.
Highlighting
About the on the fly context the Greenhopper wiki is quite helpful I think: