internet connection required?

Yes, but you still need a router that can give out an IP address. You can set static ip addresses and just get a switch instead of a router but that gets just a little more involved. Better to pay $20 extra and get a router instead of a switch...

TimeCapsule / AirPort Extreme + NAS + UQ2 would be fine.

That's a $200 router. He'll be fine with a $25 one:

http://www.amazon.com/Belkin-Wireless-Router-Latest-Generation/dp/B004N625A0/ref=sr_1_2?ie=UTF8&qid=1393911307&sr=8-2&keywords=belkin+router

or

http://www.amazon.com/Linksys-E1200-Wireless-N300-Router/dp/B004T9RR6I/ref=sr_1_2?ie=UTF8&qid=1393911370&sr=8-2&keywords=cisco+router

Chris, the short answer is yes. However when you rip media your ripper uses the internet to fetch metadata and album art. Of course internet based 'radio' sites won't be accessible either.

Simon

Mango 90% of the issues here are down to $25 routers.

Personal I wouldn't get an airport, but they are reliable.

I have my old Apple Time Capsule with 2TB of music on it (ripped from my UnitiServe).  I'd like to use it in my workshop with a Qute2.  I don't have an internet connection there, but it sounds like its not required.  

Thanks for the help.