The Xbox engineering blog has a nice article up on what exactly goes into making the "achievement" system work:

One hot topic that came up in that meeting was that profiles must be available offline. That meant that a player didn’t have to be connected to Xbox LIVE in order to access his or her achievements or profile settings. The impassioned statement was, “I have to be able to take my Xbox to Whistler for a ski weekend, and have all the achievements I earn there show up online when I plug in at home Monday morning!” Life would have been a lot easier if hotels in Whistler offered free Internet access but, instead, offline access became a big part of the profile story. Not only could you go away for the weekend, but you didn’t have to worry if you lost your Internet connection before reaching a critical milestone. Or you could play without ever connecting to Xbox LIVE, earn a pile of achievements, and have them show up in the cloud the first time you got connected. Offline access made for some late nights for the development team, but we knew it was the right thing to do and that was enough to justify the overtime.

Read the whole thing - if you've ever wondered why certain things work a certain way, the descriptions of the discussions show they really did put a decent amount of thought into the system.