I loved Wednesday's episode. Some things to note:
The woman Desmond met in the jewelry store was named Ms. Hawking. I'm sure it's no coincidence that in the previous episode, we saw one of the Others reading A Brief History of Time by Stephen Hawking. (That was Aldo, who was guarding the building where Karl, Alex's boyfriend was being held.)
Aldo was reading a page about the event horizon, where light bends across the surface of the black hole in funky ways, hiding the black hole itself. (see image, thank you Lostpedia.)
What is the connection? My guess is that the island has a gravitational field around it that hides it from the outside world Just like a Black Hole, the island is there but invisible. They've alluded to something like enough in the past that this is a very probable hypothesis. That would also explain why one of the others is interested in this book. Unless they are geeks like me...