I distinctly remember from the early days of .NET that calling ToString on a StringBuilder used to provide the new string object (to be returned) with the internal char buff
Yup, this has been completely redesigned for .NET 4.0. It now uses a rope, a linked list of string builders to store the growing internal buffer. This is a workaround for a problem when you can't guess the initial Capacity well and the amount of text is large. That creates a lot of copies of the dis-used internal buffer, clogging up the Large Object Heap. This comment from the source code as available from the Reference Source is relevant:
// We want to keep chunk arrays out of large object heap (< 85K bytes ~ 40K chars) to be sure.
// Making the maximum chunk size big means less allocation code called, but also more waste
// in unused characters and slower inserts / replaces (since you do need to slide characters over
// within a buffer).
internal const int MaxChunkSize = 8000;