Sean -
Your understanding is correct.
Once you have attached a Data Domain to a VDP Advanced appliance, you can then direct the backup data to the Data Domain.
The metadata for the backup would be stored on the VDP Advanced to facilitate restore operations. However, the space consumed by the metadata is minimal.
There are no known limitations with performance in this configuration.
We do have a limitation of a single Data Domain being attached to a VDP-Advanced appliance.