I am trying to understand how Git works better.
Given some arbitrary files and some arbitrary number of commits, how does git decide on how to split those files into blobs that are then uniquely identified with SHA-1 hashes?
I just did about 10 commits of perl/C/java code and text into new git repo and somehow git divided the files into little segments, how did it decide on how those segments should be divided?
All files go into a blob, but that doesn't necessarily mean that Git will store a file per a blob (Git has a highly efficient packed format that puts stuff together). If you are interested about the internals about Git's packing format, you're better off asking on their list, or reading their architectural documentation.
I suggest you checkout some of the basic (that is "low level") references. For your particular question, see the section on the Git Object Model in the Git Community Book.
After that, you might be interested in reading Git from the Bottom Up (PDF) or the excellent Git Internals (PDF, US$9) for an understanding of low-level under-pinnings of Git (the "content-addressable file system" and directed acyclic graph relationships).
The following things become the blobs:
This page might help you visualize things:
Git creates a blob for the content of each file, unless that same content already exists (in which case it reuses the blob). But there's more -- git also creates objects for every directory, commit, and signed tag. Every object is stored in .git/objects, until the repository is repacked (automatically or by running git gc), in which case some of the objects will be put together and deltified into a packfile (in .git/objects/pack).
It does not split the contents of a single file among multiple blobs, or little segments, as you seem to think.