Dave,
I'm no expert and still learning, but I think that debug or release place
all code behind files and other appropriate items in a dll that goes in your
bin folder.
The Aspx files still go to the webserver too.
The difference being that debug--puts a lot of debug code and symbols in the
dll and release doesn't
Debug is good for debugging but with all that extra stuff very bad in
production.
Imagine you place a bunch of code in a program that printed all sorts of
information while you were debugging... This would run slower than if it
weren't there and you don't need it in a release app.
The concept is similar although more involved.
HTH
Shane