Nice explanation, prasaddn.
To elaborate slightly: when dealing with a expected Boolean (true/false) input, XL will accept any numerical value. However, only a 0 is treated as false. Additionally, leaving a blank, is equivalent to false. Thus, all of these evaluate the same:
=VLOOKUP("Chandoo",A:C,3,FALSE)
=VLOOKUP("Chandoo",A:C,3,0)
=VLOOKUP("Chandoo",A:C,3,)
Why does it matter? It doesn't really. It's only helpful when you're either a) having the 4th argument being determined by some other function which might return a numerical value rather than Boolean, or b) you wan't to save a few keystrokes.