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How data loader works internally?

Hi all,
This question asked by the interviewer , Here is the question in detail "For exmple you want to pull out/insert data from/to salesforce using data loader and you give credentials with security token , CSV file and hit corrensponding button ( like insert,update,delete.. ) now how data loader starts the process explain what are different phases ".

And another question is
"what is the stub you have used to cover code in test classes " here I answered " I used fake data in success and failure cases to cover code". He was not satisfied with my answer. In this question what is stub means and what are all techniques to cover code.
If you want to know how the data loader works, there's no better place to start than the developerforce page, which points you at the appropriate resources:

If you want to understand in detail (or create a custom build) there's an open source version on github at:

Covering code in Salesforce unit testing is a large topic.  Once again, developerforce is the best place to start:

For a definition of stubs, I always refer to Martin Fowler's "Mocks aren't Stubs" article :