Why does Windows XP ask for time zones?

Answer 1

System time zones are used primarily for the behavior of time-based events, such as Daylight Savings time, which may not be observed in some time zones. A proper time zone may also be necessary for cookies from some websites; if there is too large a difference between the time the server thinks it is versus the time your computer has, the cookie will prematurely expire.

Finally, a correct time zone setting is necessary to update the time from the internet. If you are in the Pacific Time Zone but your system is set to the Eastern Time zone, the clock will run three hours faster than your actual local time.