The remote timeout setting affects remote servers only. It has no effect on how long queries will wait on the local server.
If you want the alter database to kick everyone out either immediatly or after a certain amount of time, use the WITH ROLLBACK option on your alter database.
Gail Shaw
Microsoft Certified Master: SQL Server, MVP, M.Sc (Comp Sci)
SQL In The Wild: Discussions on DB performance with occasional diversions into recoverability