Local host is simply your machine's internal network name, which resolves to 127.0.0.1. For example, if you ping 127.0.0.1, you are pinging yourself to verify that your network card works. What you are seeing in netstat is normal.
Go to www.yahoo.com
or google in your browser, and then run another netstat and you will see your machine non-local(meaning you will see the static address of your machine 192.xxx.xx.xxx or another dynamically assigned address)IP address is now connected to the IP address of whatever website you just opened.
Hope that helps.