I was debating some of the finer points of the BizTalk mapper today with a senior integration colleague. One topic that came up was what actually happens when compiling a map. Two important things really. The contents of the BTM file are interpretted and XSLT is generated, then a class is generated that represents a map and the XSLT is stored as a string within that class. Try it, grab a copy of .NET Reflector and decompile the assembly containing the map.
Of course at design time there is an easier way to view the XSLT. Just right mouse on the btm file within Visual Studio and select "Validate Map". Look down in the output window and you should see a link to an .xsl file containing the relevent XSLT.