How to implement setSyncProvider and verify it is working with PC
Yes, you'll need something running on the PC which is monitoring the serial port, and which will provide a response in the appropriate format.

The download on this page contains a Processing sketch which will do this for you. After you've unzipped it, look in Time/Examples/Processing/SyncArduinoClock. Open the sketch in Processing, run it, and then start your Arduino.

If you're not familiar with it, Processing is a free programming language / environment based on Java. It's aimed largely at beginners and non-programmers, and is quite commonly used for communicating with Arduino projects via Serial. You can download it here:


http://www.processing.org