Styles are styles. The effects of them does not depends on how the styles are provided: in a separate entity or inline.
As to the first part of the question, it is unclear. Do you want to know how styles work or how the rendering with style is implemented? Maybe this is not an answer, but you can start from reading about styles and their effect:
http://en.wikipedia.org/wiki/Css[
^],
http://www.w3.org/Style/CSS/[
^],
http://www.dmoz.org/Computers/Data_Formats/Style_Sheets/CSS/[
^].
Besides, many delicate aspects of style effects can be figured by just writing them and testing. However, you should understand that rendering by different layout engine use in different browsers is unfortunately somewhat different. Please see the last reference shown above for browser compatibility issues and use this comparison chart:
http://en.wikipedia.org/wiki/Comparison_of_layout_engines_%28CSS%29[
^].
—SA