Wordpress: What are "permalinks" besides mod_rewrite rules?

Question

I know that permalinks involve rewrite rules and they are somehow updated by Dashboard > Settings > Save changes. Sometimes this must be "refreshed" when you add plugins the create new re-write rules... but usually the .htaccess file doesn't change. So what is that button actually doing?

I know it tries to re-write the .htaccess file (if it has sufficient permissions on the server), but does it do something else? Is there a cache or database record somewhere as well?

For reference, here's the codex page for permalinks. (It only talks about .htaccess)

Answer 1

It also tells WordPress to write the form values to the options table for the following options:

• permalink_structure
• category_base
• tag_base

The default permalink structures denoted by radio buttons simply have the structure pre-formatted for the user, so the Day and name option for example is simply written into the database as

/%year%/%monthnum%/%day%/%postname%/

The Default option is written into the database as an empty string to indicate not to use pretty permalinks.