It's seriously an altered state.
Most of the time I'm not in that state[1], though. In those cases, I don't think I really visualize anything. I think my mind is too occupied with egg-juggling to have the cycles to spare on visualizing things.
[1] The older I get, the more difficult the state is to achieve and the more delicate it is when I've achieved it. Which is a shame because my best work is done in that state.
Really this is the same style of thought I usually have when I'm reading a book. Usually I don't have the entire thing mapped out like you'd see in a movie, just blobs that represent the characters and objects in the setting, but they're moving around and interacting as if it's a movie. If I get in the zone while reading this can temporarily override what I'm seeing so I don't even realize I'm still reading words and turning pages.