The character stays in one place while the user can walk wherever they like, the player cannot interact with things such as buttons / levers / pressure plates, or attack people (a pain on a PvP server); however, you can interact with things within a certain radius of the character. There's nothing you can do to prevent this and it randomly happens. From other people's POV, it looks like you are standing still in one place. This has been happening to me since 1.3.2 and I have seen it happen to others before.