This technique saves both space and time in actual play, and in preparation for it. I use it mostly for dungeon crawls, either solo or in small groups face to face.
The picture below has come out unusually blurry even for me, but you can still see enough to get the idea; there are three maps at different scales, which saves space on the tabletop.
Working from left to right, we have:
[Left] The overall dungeon map; actually, a map of the London Underground. The green pawn represents the party’s location. Stations marked on the map represent room complexes; I stole an idea from Neil Gaiman and have the station name indicate the main features or inhabitants of the complex – Blackfriars, for example, is an evil temple. Each line represents a different level, with stairs between levels occurring in stations where several lines meet. Lines between stations (which I describe as wide corridors) are of indeterminate length, and scale is largely irrelevant on this map. I don’t usually share this map with the players, and for smaller dungeons it isn’t necessary at all, you can work with just the room complex map (centre) and battlemap (right).
[Centre] A room complex map. Each 18mm square represents 10′. This is used between encounters as the party moves about a particular room complex; once you roll or draw for initiative, the action shifts to the battlemap. The green pawn represents the party, and the red pawn their opponents, who have just come in sight as the party round a corner. At this scale, the party generally fits inside one square. This is one of the maps from GDW’s Asteroid, scanned and printed at a larger scale; the “London Underground Dungeon” is highly modular and reuses the Asteroid maps repeatedly, although the contents of the rooms do vary.
The major time-saver here is that the party can see the room complex map, so I don’t have to describe the layout or lay it out in dungeon tiles, and they don’t have to draw it. If playing solo, I don’t have to generate the dungeon either. While this gives the players information about the layout that the characters don’t have, since they still don’t know what is in each room, I find it doesn’t affect game balance much.
[Right] The battlemap. A small area of 1″ squares, each representing 5′. This map is used in encounters, where you move into detailed combat time. I draw the walls and doors in erasable marker on the map, although I used a thin marker today and it doesn’t show up well in the picture. You can see the square grid, the party, and their opponents. Because the battlemap is relatively small, it has to be redrawn more often, which offsets some of the time saved; you can minimise this impact by printing out a pile of the small battlemaps, or by shifting from 28mm figures to 15mm or 10mm. If I used a graphics programme to print out the room complex map split over four or more sheets, the squares would be about 1″ across and I could use it directly as a battlemat, albeit one with lots of 5′ corridors; but that starts to degrade the space advantage.