[plug] How does the "127.0.0.1" address work?

[Fred Janon]

I am working on an application that needs to be accessed through the
network and also accessed locally. since I don't want to implement 2
different modes of access and use the HTTP port for both (using
127.0.0.1 for local access) I'd like to know what is the performance
difference in accessing the application through the 127.0.0.1 network
address compared to accessing from another computer on the network,
assuming that the network performance is pretty good (100Mb/sec or
more).

I wonder how does the network access through the 127.0.0.1 address
work. Is is a special path inside the network driver? Is it a loopback
at some level inside the network stack?

Does anyone a resource on the Web that describes how the "127.0.0.1"
address is supposed to be implemented?

Thanks

Fred