This speeds up access to the host site you want to see because your computer no longer has to query other systems on the Internet for the address translation. If you associate another computer's host name with your localhost IP address, you have effectively blocked that host since all attempts to access it will lead back to you. That is how we will block sites using the Hosts file. We will tell our computer that the IP address of the site we want to block is our own address. That way, our computer will not ever leave and go looking for the site we are blocking - which keeps that site from appearing because the computer thinks it has found the site and displayed it already.
Many web sites have links to other servers for the retrieval of advertisements.
This will keep your computer from even talking to the ad servers, and thus you won't see the ads, they can't put cookies on your hard drive, and you can't be profiled by them.