When you click on the synch button, it begins to synch the last 2000 items down to your offline repository (the synch icon starts spinning in a way that resembles how the Active Synch icon spins when you synch a Windows Mobile device) and then flips into the offline mode.
However, while in offling mode, Google Reader does not take advantage of one of Gears' coolest features: the ability to continue synching in the background. The way this would work is you continue to work with your offline version. But, so long as you still have a Net connection, your offline repository stays in synch with the cloud.
The advantage fo this approach is that you don't have to do anyting to make sure you always have the latest copy of what's online. You just automatically have it. But when an appliction like Reader forces you to do manual synchs, tht means you have to remember to manually synch before you go offline.Bummer.
For David Berlind's write-up on Google Gears and what Google had to say about this comment, see his post
in ZDNet's TestBed blog.