yeah. i think it means no strings or committment or expectations. just enjoy each others company (or find out if you enjoy each others company) and if you decide you don't want to see him again you can just say that, and if you decide you want to be more involved then you can just say that too...

and since you aren't committed to each other or anything like that then yeah you can go out with other people too if you would like.

i think it is nice if there is an agreement that if the person starts to feel serious about someone else (or makes more of a committment to being in a relationship with someone else) that they let you know. as you said, honesty is good. but aside from that... have fun :-)