The following are links to diagrams that will allow you to visualize how Tinycore works in its various modes. Special thanks go out to ixbrian for taking the time to create them.
TCZ Mount mode architecture: http://distro.ibiblio.org/tinycorelinux/architecture.html
TCZ Copy mode architecture: http://distro.ibiblio.org/tinycorelinux/arch_copymode.html
SCM architecture: http://distro.ibiblio.org/tinycorelinux/arch_scm.html
Full System TCZ/SCM architecture: http://distro.ibiblio.org/tinycorelinux/arch_core.html
These diagrams should help you to not only get a better understanding of how Tinycore works, but also how Tinycore differs from a standard Linux installation.