Here's a little tutorial I put together that tries to explain how Hibernate works, and to a certain extent, what is going on under the covers:
http://jpa.ezhibernate.com/Javacode/learn.jsp?tutorial=07howhibernateworks
Give it a read, and see if it can generate any more specific questions.
If you want, you can always download the Hibernate source and simply step through the code. Of course, sometimes that fine grained a knowledge isn't always helpful.
Concentrate on what's important, learn how Hibernate works, and then start employing this powerful ORM tool!