Audyssey - flat or house curve?

How does Audyssey on the Onkyo/Integra/Denon work? Does it set the speakers to be flat or does it apply some sort of mystery house curve. (I know it sets delays and speaker volume...but that's not my question).

The reason I ask is that flat does not sound good....and there are all kinds of thoughts on what a good house curve might be...certainly it changes based on the size of one's room.