SQL Server data is stored in data files that, by default, have an .MDF extension. The log (.LDF) files are sequential files used by SQL Server to log transactions executed against the SQL Server instance (more on instances in a moment). The log files (.LDF files) are truncated automatically when using the SIMPLE recovery model, but not when using BULK LOGGED or FULL recovery.
Instances allow for more than one installation of SQL Server on a single machine. If the instance is nameless, it is the default instance. Named instances are possible as well. For eg:
MACHINENAME <-- the default instance is just the machine name
MACHINENAME\Test <-- this is the "Test" instance on this machine
You can use tools like SQL Server Management Studio (as of SQL Server 2005) or Enterprise Manager (SQL Server 2000 and before) to interact with the instance & the databases under the instance.
All instances (as of SQL Server 2005) will have a hidden resource database, as well as a master, model, msdb, and temp database. These databases are "system" databases.
Not sure what else you're looking for. Hope that helps.
EDIT:
Oh yeah, physically, data in the "data files" (.MDF files, by default) is structured in what are known as "pages" in SQL Server. Data in the log files (.LDF files) is stored sequentially. In the enterprise, the data and log files are sometimes split on different physical hard drives for better disk I/O. Or hardware RAID is used for this purpose.
EDIT2:
Forgot to mention file groups. Using file groups, you can design your logical database schema such that elements of that schema are physically separated, typically to disburse the physical database across different hard drives. For example, you could have a data file group, an indexes file group, and an images file group (for binary images).