Fallback languages are sort of "back-up" languages. For example, language AA has language BB as fallback. So if a message doesn't exist in AA, it uses the message from BB. If that doesn't exist, then it will use the message from en. (However, I think that if language BB has a fallback, it might use that instead. So you have language CC as well. And that can in theory go on through all languages, though that's not likely at all. Not sure about that though.)
So we have the following cases:
en: the global fallback language
xx: any fallback language. All languages can have one, except for English.
AA: the language of a wiki
BB: a language set in a user's settings
CC: a language set by ?uselang=
So the order if a message doesn't exist in a given language is the following:
Case 1: Default, on a non-English wiki:
AA
AA-xx
en
Case 2: If a user has a different language in their settings:
BB
BB-xx
en
Case 3: If a different language is set by ?uselang=
CC
CC-xx
en
For MediaWiki:message/yy, I believe that is the same, but I have not tested it. Also, I believe there is a bug about this, for cases 2 and 3, that it should fall back to AA instead of en. I don't know its number though.
--
Jon Harald Søby
http://meta.wikimedia.org/wiki/User:Jon_Harald_S%C3%B8by