when trying to dump the database to the specified dir, it seems ok:
logger-01 ~ # mongodump --host localhost -d logger -o tmp
connected to: localhost
Thu Dec 6 13:31:54 DATABASE: logger to tmp/logger
Thu Dec 6 13:31:54 logger.xxxxx to tmp/logger/xxxxx.bson
Thu Dec 6 13:31:54 doing snapshot query
Thu Dec 6 13:31:54 2 objects
Thu Dec 6 13:31:54 Metadata for logger.xxxxx to tmp/logger/xxxxx.metadata.json
Thu Dec 6 13:31:54 logger.SoapTradeApi to tmp/logger/SoapTradeApi.bson
Thu Dec 6 13:31:54 doing snapshot query
Thu Dec 6 13:31:57 899600/2592468 34% (objects)
^C

when trying to do the same, but to the stdout:
logger-01 ~ # mongodump --host localhost -d logger -o -
connected to: localhost
Thu Dec 6 13:31:17 You must specify database and collection to print to stdout

it`s verys usable to send output to the gzip or other compressor and compress the data 'on the fly' with out huge disk usage.