Currently Android Studio's Gradle implementation requires a fast stable network connection. For whatever reason, the developers have decided to force this requirement on users at this time. There is a setting that you should be able to use to utilize a local gradle installation, but it doesn't hold. The developers know about both the network requirement and the broken switch, but are currently prioritizing other functionality. They may remove that requirement in the 1.0 or post 1.0 time frame.
[see: https://plus.google.com/u/0/115692564989237473252/posts/LGSbniYqj3Q ]
Gradle's offline mode, isn't. It should be properly named cached mode. All that switch does is tell gradle to not try to go online and instead utilize cached copies of the various networked resources. Unfortunately that assumes that you have had (and will have again) a network connection, preferably a fast stable one. Using Android Studio (last version tested 0.5.9) with a slow/unstable network results in watching Android Studio process Gradle ( and Maven ) processes usually for 2-5 minutes, sometimes for 10 minutes or more. Also at seemingly random times when coding the IDE will lock up and the cause usually involves one or more Gradle processes that have spun up.
As a comparison, using IntelliJ IDEA 13.1 Community edition (the IDE that Android Studio is based on) I compared a default "Hello Android" IDE generated program using the Android Gradle wizard (substantially similar to the only one in Android Studio) and the Ant based Android wizard. The results were as expected. The gradle based project experienced the same painful lock up and lag that projects in Android Studio exhibited. The ant based Android project was near instantaneous. No appreciable delay once the project was created and opened. Coding caused no random lockups. Testing was done on a Windows 8.1 update1 Pro machine with a dual Athlon x2 processor, 6GB RAM, and a 6Mb/0.75Mb DSL connection. I believe that last part is most likely the issue.
Unfortunately until Android Studio removes the network requirement I feel it will be unusable to a large number of developers. That's a shame because otherwise it looks to be a marked improvement over the existing Eclipse based development environment.