EDIT: This part of my answer is obsolete now that the other answer was edited: "The other answer is not entirely correct." This was meant to address the incorrect implication that less replicas = fewer paralelism. The rest of my answer (below) still applies.
Any node can execute your tasks, regardless of whether the data is located in that node or not. Hadoop will try to achieve data locality (preference order is: node-local, then rack-local, then any node), but if it can't, then it will chose any node that has available compute capacity to run your task.
Performance wise, in a typical multi-rack installation, rack-local performs almost as good as node-local, since the bottleneck occurs when transmitting data across racks. However, with high-end networking equipment (i.e., full-bisection bandwidth), then it wouldn't matter if your computation is rack-local or not. For more details on this, read this paper.
How much performance improvement can you expect from having more replicas (and thus achieving higher data locality)? Not much; 5-20% maximum improvement. But this is an upper limit, when you implement additional popularity-based replication as in this and this projects. NOTE: I did not just make-up those performance improvement numbers; they come from the papers I linked.
Since vanilla Hadoop does not have these mechanisms in place, I would expect your performance to improve at most 1-5%. This is just a ballpark guess, but you can easily run some tests yourself. The reason for this, is that more replicas could improve the performance of some of your map tasks (the ones that are now able to run with a data-local copy of the block), but it would not improve your shuffle and reduce phases. Furthermore, even if just one mapper takes longer than the rest, this one will determine the length of your whole map phase; so for many jobs, it is likely that increasing locality will not improve their running times at all. Finally, I/O bound jobs can be map-input IO bound, shuffle IO bound (map output heavy), or reduce output IO bound. Only the first type (map-input IO bound) would benefit from locality. More details on MapReduce workload characterization in this paper.
If you are further interested in this, you can also read this paper, in which they improve the running times of mappers but having the input data of ALL the mappers in memory.