To me, lungeing is riding from the ground - it has to be done well to give benefit. My voice and body, extended by the whip gives cues (some not subtle, some more so) to ask the horse for upwards and downwards transitions. I teach responsiveness and attention to me through lungeing.
A developed horse can be lunged in a bridle, with side reins or Pessoa etc if that is what floats your boat, in order to develop muscles and fitness. Top line can be developed on the lunge that will serve the horse well when being asked to carry a rider, and perform in whatever discipline he is in.
I like the horse on a lunge line, but never 'leaning on' or 'hanging off' the line. He must be in self-carriage. I can see his movement and assess his use of his body. I am in the centre of the circle, with my lunging arm and my whip arm pointing roughly towards the nose and tail of the horse. If I get behind the movement, he has a chance to turn in. If I get in front, I will confuse or block him.
The whip is used by me to mentally extend my driving forward arm nearer to the horse. If I am lunging a horse with attitude who is refusing to move, I can flick the end of the whip at his hocks. He will only need this done once to know that he shouldn't be ignoring me.
I personally don't use lungeing to quiet or calm a horse before I ride, but I know that many people do. I think that it's more a 'collecting of the brain' in this respect.
Like Foxhunter, I also think that lungeing can be followed by long reining as part of a horse's education.
What I don't think lungeing is for is to 'wear him out before I get on' - because a fit horse can hunt all day, so is not going to be tired out by running round on a lunge for 10 minutes. I also don't think lungeing should ever be used as a punishment in the 'he bucked me off so I put him on the lunge and made him sweat' kind of way. This might make the person feel better and get revenge, but it won't achieve anything by way of training for the horse.