First, I don't have a G2 and I know that Quiet Mode is unique to this phone (as in, not an Android feature).
If I interpret the manual correctly, there is no "Manual" Quiet Mode. It's more of a... well, "Enable/Disable the Quiet Mode Scheduler".
If that's true (again, I'm not saying it is), then turning on Quiet Mode when there is nothing scheduled may put it into Quiet Mode, but at whatever interval might be built into the app (e.g. every minute) the app then checks the current time against the schedule and decides that the current time is not within the schedule and turns Quiet Mode off.
When there is a schedule, then the Quiet Mode's on/off button enables or disables the schedule temporarily (e.g. you are put on call tonight for work) without losing the times set.
I'm thinking that Silent Mode (Normal/Vibrate/Silent) was intended for temporary use (like at the movies), and Quiet Mode was more for scheduled use (night time). Currently I use a 3rd party app to manage my schedules but plan on giving Quiet Mode a try when I get my G2.