Right. It could lead to tearing, but not likely as tearing is usually a result of the GPU outputting frames faster than the refresh rate of the monitor, but does prevent that sudden jerky drop to 30fps as regular Vsync can do.
Umm actually no, tearing is not a result of that. Tearing has
nothing to do with amount of frames. It doesn't matter if you are rendering less or more frames than the refresh rate, and it doesn't make it more or less likely to happen. It occurs because the frame outputs are de-synchronized from the monitor's refresh intervals. And it occurs if you render 10, 20, 30, 40, 50 or 50000 frames. For your eyes to see fully drawn integral frames, you MUST synchronize them to the monitor's refresh intervals.
Adaptive V-sync is simply designed to address those games that do not support triple buffering, and who's frame rate would therefore drastically drop to a multiple of the refresh rate (60>30>20>15) if the card cannot sustain 60 frames.
For the majority of titles it's pretty useless since vsync + triple buffering offers a much more pleasant experience. Actually it's completely useless because you can just use D3D Overrider to force triple buffering for those games that do not support it out of the box.
So you can tell NV to shove Adaptive Vsync up where it came from.