Mountain Mode was originally designed to preserve battery power before getting to a long mountain pass such that full power would be available for steep climbs and overtaking slower vehicles. When engaged, it holds (or charges) the battery at 45 percent state of charge. The difference between this and battery hold is that the Ampera's feature retains the battery at whatever level it's at when engaged and doesn't recharge the battery. The Ampera doesn't get Mountain Mode.
However, as Chambers found out, using this special mode on regular non-mountainous trips can improve efficiency. How's that you ask? Well, when the battery is depleted the Volt gets better fuel economy on the highway (40 miles per gallon) than in the city (35 mpg), so it makes sense to try and do as much fully electric driving in the city as possible. But the Volt has no idea what kind of a trip you are taking and will always use up the battery before starting to burn any gas. For trips longer than 30-40 miles where you know you will be doing some of those miles on the highway and some in the city, you can reserve a few of your electrons for the last part of the trip if that is low-speed city driving. It's pretty simple to do, too: just engage Mountain Mode when the remaining battery capacity is roughly equal to the amount of city miles you'll have at the end of the trip. Then, when you exit the highway, revert back to Normal driving mode to enjoy the gas-free miles you saved up.
[Source: Plugin Cars, GM]