@Jason818: Right now, all I expect is a clever set of heuristics, sort of Eliza on steroids (and quite some steroids it got).
And yet, this morning, Cortana asked me: "Is this your home?", with a Yes/No button and a "How did you guess" link. I tapped the link and it replied "Your phone is here often in the evening".
I know that someone wrote some code to make this happen, and I even know I should find this borderline creepy. And yet, I couldn't avoid smiling. Before coffee, nonetheless.