Android Application Licensing Overview

I am trying to understand Android application licensing. I have read most of the documentation on the Android website about this, but I'm still confused.

Here is my dilemma:

I am creating an Android application, and I decide if I want to release it as a paid application or billing in the application. Now I'm currently releasing a paid app. My understanding is that I can send the application to the Android google android game (or to the market) as paid and indicate the price of the application and what it is.

However, I see that Google provides the Application Licensing service, which seems to allow Google to control the list of users who buy the application and make sure that the user really paid for the application. Otherwise, prohibit users who illegally installed a paid application on their devices if they did not purchase it. Please correct me if I am still wrong. Now, it seems that when the application is executed for the first time, it will use Google licensing to authenticate the user. What happens if a user does not have an internet connection? Will the application still start, or will the application require an Internet connection to run each time?

Thanks. Andy

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