GLSL allow you to see in realtime what you use in the Materials, that’s especially usefull when you use normal maps.
Another .blend example :
http://www.pasteall.org/blend/13451
If GLSL was actually working on your card, what you would see in the viewport when enabling GLSL is what you’ll see if you render the models, both sphere would have a rock texture on them, and one of those sphere would even had some kind of normal effect on it.
But as GLSL does not work on the kind of Intel card used there, what you will see is both model using the checkboard texture from the uv/image editor, not the textures from the materials.
What you show in your screenshot would be the same as if instead of GLSL you switched to Multitexture.
So in the end, when you enable GLSL on card like g31/g33 , it is the same as if you enable Multitexture.
I have read that on linux they have the mesa opengl, that can actually emulate the shaders from GLSL on CPU for cards that does not have OpenGL 2.0, but on window there’s nothing like this apparently.
G31/G33 can emulate Direct3D shaders on CPU though (meaning that if you run a Direct3D application that has normal map, you would be able to see them in real time), but just not OpenGL shaders , mostly because Intel clowns never cared.