Dissolve applies the blend color to the base image in a random pattern of specks, according to the opacity of the blend layer. The specks are denser in areas where the blend layer is more opaque, and sparser in areas where the blend layer is more transparent. If the blend layer is 100% opaque, the Dissolve blend mode will look just like Normal.
I have used the Dissolve blend mode in my Snow Globe tutorial to make snow. Another practical use for the Dissolve blend mode is to create a rough, or grunge effect for text and objects. It can also be useful in conjunction with layer effects in creating textures and effects.