It tries to load a text file over HTTP (http://www.msftncsi.com/ncsi.txt) and fetch the DNS record of dns.msftncsi.com. If the return of either is not as expected, Windows indicates 'No Internet Access' (although you are connected to a network).
More clueful, certainly.
Considering some of our active theories, it may have only started becoming used as a result of that Terms & Conditions snafu that occurred the other day.
Either way, the problem predates my registration of the domain, which was around 13 hours ago now. I registered bogusapple.com as a result of seeing use of the domain.
Most likely the real reason behind this is that some programmer in their employ who didn't know better hammered in "bogusapple.com" as the first thing he could come up with, committed it since it worked for him, and now a lot of people are trying to ascribe more complex intentions to Apple than that.