Just a very interesting series of posts by Jorge on how the Active Directory clients determine which domain controller servers their logon request and which domain controller sends the GPO files over.

DC Locator process part 1
DC Locator process part 2
DC Locator process part 3

A small add-on: using start - run - cmd and execute "set" you can easily determine your logon server. Determining which DC sent the GPO's can be determined by running "gpresult /R" (Windows 2008) or "gpresult" (Vista)

The following Technet article is also a nice source of information: How DNS Support for Active Directory Works