Active Directory Sites and Services

Hello All,

   This is my first time that I am playing with Active Directory Sites and Services, so forgive me if I this is a stupid question.

   I have create two sites.

Site A: (Default fist Site) with a Windows 2008 DC and IP range of 192.168.0.0/24

Site B: (Secondary location) with a Windows 2003 DC and IP range of 192.168.1.0/24

I am trying to set up GPO's that will only apply to PC in specifi sites. e.g. Only a PC is Aite A gets printer_1 installed.  To this end I have created a GPO and linked it to the relevent site in the GPMC.

My question is how does a PC or DC know which site a PC is in, does it read the IP address and apply the GPO accordingly, or look at which DC authenticated the device?

Regards