Consider this passage from the beginning of The Girl with the Dragon Tattoo (by Stieg Larsson): A retired industrialist receives a gift-wrapped pressed flower.
"[It] was altogether an unpretentious flower. It had no known medicinal properties, and it could not induce hallucinatory experiences. It was neither edible, nor had a use in the manufacture of plant dyes. On the other hand, the aboriginal people of Australia regarded as sacred the region and the flora around Ayers Rock [where it presumably grows]."
Passages such as this one are part of writing craft of course; there's nothing very special about the particular novel or author. But I want to note it as an example use of the space of possibilities technique. Let's look at the function of the passage, the purposes it serves.
1) First of all, it belongs to the opening episode which is primarily a teaser. We're not told anything more about the flower until much later. True, we only gradually learn that we don't, when we read on. For all we know at the time of first reading the passage, the secret might be lifted right away. But in fact it's not; the story switches to a different line of development first, which doesn't have do do anything at all with the flower, and that creates a nagging curiosity that drives us to read on.
2) Besides that dramaturgical function, the quoted passage has another one: it opens up a space of possibilities. It does that in two senses, one more internal to the world (and the characters) of the novel, the other having to do with the audience and its relationship to that world.
First, then, it's the sort of a space of possibilities that a policeman or forensic investigator would consider when receiving a parcel with an unexpected content: is it a bomb? a spying device? seeing that it's only a flower, could it be poisonous? might it convey a message? stand as a symbol for something? is it evidence, a lead, a reminiscence, a threat? or is it simply just something without any meaning? (But then, who'd have made the effort of sending it, and why?)
The second sense in which the passage spans a space of possibilities is in a play with the audience's expectations: the novel is a piece of crime fiction (of which the model reader, that is, the sort of reader which the author had in mind, is well aware). But there's many different kinds in that genre, still. What sort will this one be? A realistic one where sending flowers is plainly what it is in everyday life (a nice gesture)? A complicated whodunit where they are the murder weapon in some devious and nearly untraceable way? A sinister serial killer psychogram where they symbolize a childhood drama that now triggers a string of gruesome events? (Normally, readers would not expressly and distinctly go through these options in their head, but they're still there as part of the underlying set of expectations.) By alluding to these options, our passage and its context make us aware of that space of genre possibilities as well. Even if the actual novel then proceeds to pin down its own type, having walked us briefly through that space it has heightened our sense of the scope of that field into which a piece of fiction might lead us.
3) All this play with expectations (by having a teaser question that isn't answered for a while, and by spanning a space of possibilities) awakens our imagination and generates curiosity. This gets us more smoothly over the first part of the book which will necessarily have a lot of expository stuff (introducing characters, rolling out backstories, describing settings) and not that much of a plot yet. It also plugs us into the realm of unreality, if you will. (Though that is of course not much more than high-flown language for the earlier point that it whets the imagination.)