I haven't gotten around to Mod Podge yet, but here's what I think FWIW.
Sealing means protection against water. If the item will not come into contact with liquids (e.g., frig magnets), you can skip sealing if you want to. Mod Podge is not completely waterproof so, if your item might come into contact with water (e.g., coasters) you want to waterproof with an acrylic sealer.
Found this FAQ that might be helpful
http://modpodgerocksblog.com/learn-how-to-mod-podge
and here is the acrylic sealer that is recommended if you want to make your Mod Podge item waterproof:
http://www.plaidonline.com/mod-podge...70/product.htm (But, you don't want to use a spray sealer indoors. The FAQ above recommends a brush-on sealer if you are working indoors.)