Yes, that is one example of bouncing.
Anytime you take the output of tape tracks, and record them to different tracks, you are bouncing tracks.
For example, say you've used tracks 1-5 to record drums. Say you've got a live scratch track on track 6, a blank track on track 7, and a click track on track 8.
You can playback and mix tracks 1-5 down to two tracks on, say, a mixer, and send that 2-track output to the input of tracks 7-8, while recording on those tracks (7 and 8.) it's really quite simple when you think about it.
That way you can overwrite tracks 1-5 to use them for your remaining instruments, and whatnot.
There is a slight degredation of quality, including an increase in tape hiss, distortion, and tape "coloration" every time you bounce tracks. Depending on the quality of the tape deck, and your heads, this factor can be negligible.
Track bouncing is the next step up from having to do SOS (sound-on-sound.) While it may be inconvenient to have to bounce tracks, at least you don't have to turn off your erase head on a track and add more crap to the same track, risking messing all the takes up. (like the Beatles had to do with their early 2-track recordings.)
You just have to make sure that you are getting a STRONG SIGNAL TO TAPE when recording. Keep pushing the levels until you hear distortion, and then bring them back down a touch. Do this while recording, AND while bouncing to achieve the highest s/n ratio.