The way I understand http://en.wikipedia.org/wiki/Hydronics#Single-pipe_steam, he has a system where the heater pumps water vapor into his radiator, the vapor condenses, producing heat, and the water flows back through the same pipe that pumps in the vapor.

If the valve is closed, no steam enters the radiator, so no heat is produced, and no water is produced in the radiator.

If the valve is half-open, I guess the steam flows in fine (in reduced quantities), but the water does not flow back (looks like a design error in the radiator, or maybe it wasn't installed correctly; I guess that such radiators are fairly sensitive to being installed level)

With ever more water in the radiator, the water eventually exits through an overflow valve.

Yeah, this is my read on it as well. I don't have a lot of experience with steam heating systems, but I noticed that I had some issues with water dribbling out of the auto-bleed valve when the main steam valve was half closed. For all I know, my observations could also be caused by maintenance issues with the radiator... --Andrew (Terg.is)

No, it's standard. The pipe needs to have room for both the steam to come in and the water to flow back. If you partially obstruct it, the steam comes in (because it has higher pressure), but the water can't flow back down and fills the radiator.