After installing and configuring the plugin, I created a civiCRM contact who does not have a corresponding Joomla account.
I then use the core frontend Joomla Create User account interface to create a new account (using the contact's email address).
When I click to submit the frontend form, I get the message:
CiviCRM contact not found but matching exists
I click on the confirmation email to activate the account.
I log in, and then I click a menu item to allow the user to Edit their civiCRM contact profile -- and I do not see their profile data (contact name, address, etc)
I then check in civiCRM, and a new contact has been created (instead of the matching).
I'm using Joomla 2.5.24 and civiCRM 4.4.5
Here's a movie showing the testing sequence:
Screen Movie Walkthrough