It gets saved locally so you can access it when they're offline. It'll also be possible to instruct your pinning service to seed it on your behalf.
> I didn't understand "We also use a second “private” dat for records which should be kept off the network".
I'll talk more about this in the future as Beaker 0.9 is closer to release. We basically are creating a filesystem with a root dat (which is private). Your public dat will then be "mounted" to it at /public so it feels like one unified FS. The structure will look something like this:
/.data/.unwalled.garden/* <- private records
/public/.data/.unwalled.garden/* <- public records
At this stage, I'm pretty sure we're going to need to use proxies to solve this. We're open to using an anonymity protocol like Tor but still uncertain about the tradeoffs.