Hi,
If your database crashes on Tuesday morning,RMAN will first apply the level 0 backup taken on sunday.Then it will apply the monday level 1 backup(level 1 backup will contain all the changes made between Tuesday and Monday) and then till the time of the database crash RMAN will apply all the archivelog files on the datafiles to bring it to the point of crash.

Regards,
ROhit Nirkhe,Oracle/Apps DBA,OCP 8i
[email protected]