My understanding, in a single player circumstance, is that the money you put on the market eventually gets bought at the price you set, whether or not this is above or below the market price. And the market always has a "floor" below which its price will not drop. I don't think there is a ceiling, however.
That is, I could put crystal on the market and get double the price than if I just pressed the sell button at that moment. What's the catch? You have to wait for your money as your crystal is slowly bought up. Why should the AI buy crystal at twice the price? I have no idea. I can make up reasons (oh, the market doesn't have infinite resources, let's say), but those reasons fail (because apparently the market does have infinite resources!).
In a multi-player environment, all of this changes. For example, let's say you have tons of crystal and sell it below market. This means another player can't get as much for selling his crystal as he might have wanted. You've under cut him. Prices also fluctuate depending on how much of a given item is being sold and bought at any given time (this is also true in single player, I think). So if everybody is in "buy" mode for crystal, the price will go up and up. Again, you could manipulate the market this way. Let's say you have a ton of extra money for whatever reason, you could buy, buy, buy up crystal, driving up the price each time, knowing this will put a big hurt on somebody who needs to buy crystal.
Basically this allows a guy with lots of cash to cripple a guy who needs to buy resources...and it's done without your fleets ever needing to meet. Market warfare. In practice, of course, games tend to be close enough for long enough that one has to be careful at over playing himself/herself on the market. In the right circumstances, particularly with allies, this can be pretty powerful.