The podcast explains how the C# compiler transforms high-level C# code into a lower-level representation that the .NET runtime can execute. The author uses examples such as the foreach loop, using statement, and async/await keywords to illustrate how the compiler converts these constructs into more detailed, efficient code. The source also provides methods for examining this lower-level code, such as using tools like ILDASM or Roslyn-based tools. Understanding these transformations can help developers write more efficient and resource-safe C# code.