question about static URL

I have my site on localhost using WP 3.4.1 with a child theme of Esplanade.
My Permalink Settings are a Custom Structure of /%postname%.html

The URL that is returned is localhost:8080/wordpress/sample-page/our-services

2 questions:

1. /sample-page is showing in the URL. I am not sure what created it, I certainly do not have a folder of that name. Is this generated when using localhost and will it resolve correctly when uploaded to a production server?

2. My permalink (/%postname%.html) has an HTML extension. Why does this not show in the URL?

I am moving from a static site to WP and am trying to keep the URL intact. I can always add a permanent redirect to .htaccess but permalinks would be better.

thanks