I have checked in buid directory and have not found makefile there. How does Visual Studio 2008 buid the project? Does it use makefile?
The NMAKE utility has been distributed with Visual C++ since back when it was called Microsoft C/C++ Optimizing Compiler, and is very similar to Unix make. Previous versions of the IDE actually used NMAKE makefiles, but this isn't true anymore. You can write NMAKE makefiles yourself if you want, but it sounds like you want to know what the IDE does.
Starting with VS2010, the build system changes to MSBUILD, which bertelmonster mentioned. But not in VS2008.
In VC++ 6.0, C++ projects have their own build engine integrated into msdev.exe.
In VS2002 - VS2008, it's a separate tool, VCBUILD. But you can still invoke it via the main IDE, devenv.exe, see the /BUILD option, and devenv is the best way if you have inter-project dependencies in your solution.
VS9 doesn't use makefiles by default the way Linux-flavored IDEs might. Instead, VisualStudio uses 'solution' and 'project' files. A Project file (*.vcproj for C/C++ projects) is basically a replacement for makefiles, and contains instructions, compiler directives, flags and everything else needed to compile a single 'project'. In this parlance, a project is a single output file, such as an EXE or DLL. But this same mechanism can be used to produce any kind of output, including TLBs, text files, widgets and ice cream cones (if your machine has the capable hardware :) )
A 'solution' is a collection of projects, and the solution file (*.sln) contains lists of projects needed to build an entire application suite, typically. It also contains dependancy information, so that the projects are built in the correct orders.
Solution and project files are human-readable text, but in the VS world you would virtually never want to edit these files yourself the way you would tweak a makefile by hand. Instead, you would use the IDE to change compiler flags, preprocessor directives, output directories, and all the rest.
That is how VS works by default, but VS is also capable of using makefiles in much the same way as Linux-flavored IDEs. It still uses solution files in this case, so you can mix projects that use makefiles with projects that use project files within the same solution. The VS IDE is actually quite powerful in this regard, and gives you the ability to do pretty much whatever you want. This power however comes with a price -- with so many features and capabilities available in the IDE, it can be rather complex and takes what you might think is an unwarranted ammount of user brainpower to fully understand.
If you want to create a makefile project, you can do so by doing File>New>Project... and then selecting Makefile Project from the main Visual C++ list of project templates.