Patch Set 4:

on command line remote tracking branches are created with
- $ git remote add <name> <url>   [1]
- $ git branch --track <branch> <remote-branch> [2]
  create a tracking branch. Will push/pull changes to/from another repository.
  Example: git branch --track experimental origin/experimental
- when branch.autosetupmerge=true git branch and git checkout will create remote tracking branches when the source for the operation is a branch in a remote repository

Hence to me it looks like the "create new branch" in this dialog should always create a local branch. Depending on 
configuration a remote tracking branch should be implicitly created.

[1] http://kernel.org/pub/software/scm/git/docs/git-remote.html
[2] [1] http://kernel.org/pub/software/scm/git/docs/git-branch.html