Alternate locations are simply other places on the network that may have the same file you're looking for. The stat in the library (Locations) reports the number of alternate locations you know about for files you are sharing. When you attempt to download a file from a remote host, the host will inform you of other places on the network that also have the file. These will be considered 'valid' locations. Hosts may be removed from the valid locations if you attempt to connect to them and they aren't online or report that they do not have the file you're looking for. That's basically it. The connections shown in your connections tab have absolutely nothing to do with alternate locations.