Hello Jeff,
Thanks for using Apple Support Communities.
To learn more about locations, and the Automatic Location for Networks, please see the information below.
What is a "location?"
In the Network preference pane of System Preferences, a location is a set of network preferences.
The Network pane has a Location menu that you can use for changing or creating locations. Users of portable computers may frequently connect to the Internet or networks in different ways at different places, so "location" reminds you that Mac OS X has the ability to store different sets of network preferences, which you may name for the location in which you use them.
The "Automatic" location
By default, Mac OS X has a location named Automatic, and all available network ports are set to active status. A port (or "network interface") may be a modem, Ethernet, AirPort / WiFi card, or other device used to connect to the Internet and/or a network. The name Automatic is to remind you that Mac OS X automatically searches all active network ports for your connection to the Internet. For example: You may use a wireless network at home but use an Ethernet (wired) network connection at work. If you set up both of these ports then travel between work and home, Mac OS X automatically detects which port to use to connect to the Internet or your network.
Using network locations (Mac OS X v10.6 and later) - Apple Support
Take care.