Perhaps we can add to that just a bit.
Take a sample file and define a serial number field with the on commit option selected. Place this field on a layout where you can see it.
Select New Record to create a new blank record. You'll see that the serial number field is blank until you do something to "commit" the record. Clicking a blank part of the layout, selecting a different record or closing the file will all "commit" the record and you won't see a number in this field until the record is committed.
Now change the option to On Create.
Create a new record and see how the number appears immediately.
an Issue to look out for:
With the On Commit option, if you use the serial number as a Primary Key and put a portal on your layout that uses this Primary Key to enable entering data, you won't be able to enter portal data until you commit the current record so that your serial number field is no longer blank. In those situations, On Create will probably be the better option.