It would be connected to the OUTPUT of the onboard regulator but it wouldn't matter because the onboard regulator would have nothing connected to it's INPUT because it's INPUT is the Vin pin. It would essentially be like it wasn't there since no current would be flowing through it with nothing connected to the Vin.
The data sheet for the regulator recommends a diode from +5 (anode) to Vin (cathode) to avoid reverse driving the regulator like that. The Duemilanove had a more robust regulator that could take it.
The USB +5V is a DIFFERENT input so if you connected your USB to the arduino WHILE you had your walwart connected to the +5V & GND then you would have TWO +5V power supply OUTPUTS connected TOGETHER.
If Vin/2 is > 3.3V, the FET that allows Vusb into 5V is reverse biased, thus only the regulator output flows into the 5V bus.