The program shuts down when you close it. When it is restarted it checks your system clock and calculates what would have happened while the game was off, as you suggested. It does not stay in memory. I know that VV is written so that if your machine is having problems with high memory usage, VV will give up some of the memory it uses so that you might see it running slowly if another application is being a hog.
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To err is human; to arr is pirate.