Can someone explain the nuts and bolts of what's really going on under the covers?
A:
At a low level the feature works by converting the expression into either an XAttribute or XElement node depending on the location. Under the hood the expressions are just converted to the appropriate XAttribute or XElement constructor.
The most instructive way to understand what's going on here though is to look at the decompiled output of the code. Or even the C# equivalent of the VB XML literal. This blog entry has a nice little entry on the subject
JaredPar
2009-09-04 20:23:41