I have started to use anonymous delegates a lot in C# and I have begun to wonder how efficient the complier or runtime is in removing them from the code that is actually run and I haven't seen this detailed anywhere?
Is it clever enough at all to inline them and collapse recursive uses that could be statically deduced?
In most cases, no, it isn't.
However, unless you're noticing actual performance issues and have tracked them down in a profiler, you shouldn't worry about it.
The C# compiler will never optimize them. However the .NET JIT compiler might if they're simple enough.
No the C# compiler will not optimize a lambda expression into inline code. Anonymous delegates and lambda expressions will always produce a corresponding delegate or an expression tree. This is covered in section 6.5 of the C# language spec
An anonymous-method-expression or lambda-expression is classified as an anonymous function (§7.14). The expression does not have a type but can be implicitly converted to a compatible delegate type or expression tree type
In certain cases the lambda will be cached and not recreated for future use. But it will not be inlined.