When working with html on the desktop and putting the Adsense code in the page. I hit test in dreamweaver, and it throws the page on firefox from example: file:///C:/Documents%20and%20Settings/Compaq_Owner/Desktop/index.html and the ads are still targeted. How does adsense know? Its not like they Adsense-bot can crawl the page off your computer.
If you have other sites that conatin the same themed content adsense say "well, we can't get to that page, So let give him the type of ads we usually give to that account". Adsense doesn't crawl the page every time an ad is diaplyed.
if you internet connection is live, I don't think it matters. However, if you are disconnected from the internet I don't think it would work.
Adsense bot crawled your page/content before.. thats how adsense displays ads on your page even its on your desktop. True.. if you are not connected to internet.. no ads will display..
Beside the point since adsense can't crawl the page on your PC. Its getting keyword off the page somehow still to make ads.. There must be some JS that makes your browser send off the title keyword to google or something.