newbie question - php parsing

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Hi all,

A little doubt caught me while I was writing this snippet of code for
a wordpress template:

<?php if (the_title('','',FALSE) != 'Home') { ?>
<h2 class="entry-header"><?php the_title(); ?></h2>
<?php } ?>

I always thought that php was called only between the <?php ?> tags,
and I'm pretty sure that's right, while HTML code was simply wrote in
document as is, without further logic.
Now, I can't figure out how this snippet works: I mean, shouldn't HTML
code be simply put on document, as it is outside php invoke?
Effectively if the title of page is 'Home', the HTML part is totally
skipped.

Is the if construct that does all the magic inside?

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