OK...Jim knows a LOT more than I do, but I'm going to take a poke at answering your question. That way when they tell me I'm wrong...I will learn!!
With indexing on or off, you can access any of your files if you type in the exact url. Thus, with indexing on or off, if you type in http://redo.net/test.htm'>http://redo.net/test.htm , you should be able to view your page.
With "no indexing" off, if you type in http://redo.net, since there is no index.htm file in the directory, a page will open that will list all the files in the directory.
With "no indexing" on, you will get a page cannot be found error.
I would say yes, this is correct.
Now...I hope I didn't confuse the issue more...and I hope I'm not way off base!!