If I am not connected to the internet, 1200 would not display the Topo maps coming from the Services server. It hasn't been a problem because the Imagery Basemap always shows. Now, with 1500 the Imagery Basemap is nothing but a blue screen when offline.
500 used to cache the Topo maps off the Services server so you could see them offline, then that went away with V900.
You aren't missing anything. Service data, such as the ESRI World Imagery service, does get cached onto your local machine. However, Explorer is fundamentally designed to work in an internet connected environment so without a connection, several parts of the software won't work (data content from Online services, find, directions).
As such Explorer 1500 must be connected to the internet when it starts up in order to display any data coming from a service. If you aren't connected then you will just see a blue map. That said, if you disconnect from the internet once the application is running, then any data stored in the cache will be displayed, but obviously any other functions requiring internet connectivity will not.