While the memo does offer a number of scenarios that will work without an Internet connection, it does not talk about the installation process or the possibility that games (or at least some of them) will require online activation in order to work, as has been rumored.
Microsoft isn’t going to say anything we don’t expect them to say till May 21st at this point. It will be best for them to try to explain it once, but the rumor mill will continue to say what it will.
Read the Microsoft memo here.