Display: list-item behaves exactly as display: block, except that a content containing the list marker is automatically generated before the list item. Properties list-style-type, list-style-position, list-style-image are used to parametrize the generation of this content.

Example:

li {
    display: list-item;
    list-style-type: disc;
}

is equivalent to:

li {
    display: block;
    margin-left: N; /*make room for the bullet*/
}

li:before {
    display: marker;
    content: disc;
}

Note that if the CSS style sheet explicitly specifies a generated content before the list item, display: list-item is strictly equivalent to display: block because, in such case, no content is automatically generated.