Thanks tubemonkey
I've been lurking for a few months now but felt this was a topic I should post in.
The AmazonLocal ads might be worthless (well, they certainly are when you're outside of the US) but I would I might find them more aesthetically pleasing than having something that amounts to nothing more than an error message on my screensaver.
My guess as to why the ads only appear at certain times is that is the time when a new ad is supposed to show. It somehow "refreshes" the ad cycle in the Touch, shows the new ad once, and then shows the "Please connect wirelessly..." until you restart or a new ad is timed to show.