Where do checked-out documents go?

Upon checking out an document, I'm presented with this pop-up window which allows me to de-select the "use my local drafts folder" before committing.

I know that with the checkbox selected, my document goes into a SharePoint folder on my machine.

But what happens to the document if a User were to de-select the checkbox? (I have experimented and still don't know where the document goes)
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It stays on the server. The whole purpose of the Local drafts folder is to be able to work on the document off-line.
IIRC, If you decheck it, it just goes in your temporary internet files location. It is still stored "locally".

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sandshakimiAuthor Commented:
So what's the value in unchecking the option?
You are correct MsShadow. Since you aren't actually running Excel on the server, the system needs to download a copy so it can present it to you in your local install of Excel. The difference is that if you check the option it will go to a directory that isn't as volitile.  
The value of unchecking is minor since it just means that all copies will be cleaned with your temp files.
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