Live Cd Persistence

[palco]

Dear Guys, :) 
Some one plese tell me how this tecnology works? I read the wiki. It is
good. But an important question for me which is not there is if the
structure of files and folders on the flash drive modified and saved to
the flash drive are the same as on the LiveCD? Have you seen the
contents of the flash drive? Does the system symply load a file in a
folder from flash drive if it matches a file in folder on LiveCD on the
boot? Is this the model, concept?


-- 
palco