COALESCE Function in TSQL

I'm not sure why you think the documentation is vague.

It simply goes through all the parameters one by one, and returns the first that is NOT NULL.

COALESCE(NULL, NULL, NULL, 1, 2, 3)
=> 1


COALESCE(1, 2, 3, 4, 5, NULL)
=> 1


COALESCE(NULL, NULL, NULL, 3, 2, NULL)
=> 3


COALESCE(6, 5, 4, 3, 2, NULL)
=> 6


COALESCE(NULL, NULL, NULL, NULL, NULL, NULL)
=> NULL

It accepts pretty much any number of parameters, but they should be the same data-type. (If they're not the same data-type, they get implicitly cast to an appropriate data-type using data-type order of precedence.)

It's like ISNULL() but for multiple parameters, rather than just two.

It's also ANSI-SQL, where-as ISNULL() isn't.

I've been told that COALESCE is less costly than ISNULL, but research doesn't indicate that. ISNULL takes only two parameters, the field being evaluated for NULL, and the result you want if it is evaluated as NULL. COALESCE will take any number of parameters, and return the first value encountered that isn't NULL.

There's a much more thorough description of the details here http://www.mssqltips.com/sqlservertip/2689/deciding-between-coalesce-and-isnull-in-sql-server/