river (7/10/2009)
Does this mean that this command only stops executing after the timeout expires, if the engine is on one server and the management studio from where i'm connecting is on other computer?
No. The remote timeout only affects commands that are remote to this server. ie commands that the SQL Instance with that configured on runs against a different server. Either via linked servers (openquery, 4-part naming) or ad-hoc remote calls (openrowset)
Timeout is always a client setting, so it's set on whatever the client is and if affects the remote server. If you want your management studio queries to timeout (why?), you need to set the timeout within the client, ie management studio.
SQL itself has no setting for timeouts of queries that it is running. It's always the client that specifies how long it is willing to wait.
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