Currently, Google can report only conversions for ads shown on Google.com and some of our ad network sites. This means that not all conversions originating from your AdWords ads will be reported. However, your conversion rate, cost-per-conversion, and value / click are adjusted to reflect only those sites from which we can track conversions.
I'm not sure what precisely "some of our ad network sites" includes, but it doesn't sound like it includes AdSense sites yet. I hope they plan to include everything.
This is a really great step forward -- necessary, even. Overture should have done this ages ago. More information makes for a better marketplace in the long term. Except for the people who profit from ignorance...and they don't deserve our tears.