Here is a brief rundown on how EAC works.
When the drive's C2 is not used (unchecked), EAC reads a chunk of data, then goes back to re-read it. It then compares both chunks to see if they match. If it matches, then it goes to the next chunk. If it does not match, it goes back and keeps trying until it gets two consecutive matching reads.
Nb. When C2 is not used, EAC already reads the entire disc twice (or more), so doing Test and Copy is really unnecessarily. I've seen No C2 + T&C result in mis-matching CRCs, but I think that is a bug in EAC. It is difficult to prove, since there is no resulting .wav file during the Test read. However, if you think that there is a reasonable probability that EAC will read the data incorrectly the exact same way twice in a row, then you should use Test and Copy. Me, I won't worry about the miniscule chance of an error that I won't hear even if I listen to it 100x with headphones.
When the drive's C2 is used (checked), EAC reads once and relies on the drive's C2 ability to detect errors.
EAC does not correct errors! (Although in an older version, there was an option to use C2 to correct errors, but due to German laws regarding circumventing copy-control, this feature was removed. In any case, the consensus is that since the majority of drives have poor C2 abilities, this is an undesirable feature.)
An important thing to note is that even if EAC gets two consecutive reads in a row, this is no guarantee that the rip is error-free! This is why you should use AccurateRip. If possible, use a CD drive (not DVD), as CDs drives are better than DVD drives at reading CDs, in general. The possible exception are Plextor-made drives.
Kudos to the guy who uses Plextools to rip. It often gets passed over when discussing secure rippers. The only real con of Plextools is not having AccurateRip.