I have a quick question about the connect=x.x.x.x option - what exactly does it do? I understand that it "points" a certain bitcoin client to another PC on the LAN, but what does this mean for the bitcoin application itself? Does all coin generation funnel to the wallet that is held on the target PC? Or does a client that is pointed to another local PC just funnel its connections through port 8333 on that PC, and still manage its own wallet?

Just curious.