How Does WB Work?

Ok, so you set your white balance to something like Tungsten for shooting indoors... what actually happens in camera here?
Does the sensor make the blue photosites more sensitive? or does the sensor give equal sensitivity to all RGB photosites and the camera just process the colour?
I've noticed in adjusting RAW images that if you capture a scene in Daylight WB and radically adjust the Temperature later in the processing, that highlights will lose detail and be blown out... and vice versa.
What's the process for WB settings? What's really going on?

Joshua,
RAW is just that. It's pre-WB etc. The CCD has its own native colour-space, and the conversion will perform a transformation from RAW through to the target colourspace using the WB as one of the modifiers.

You are more likely seeing gamut clipping, rather than exposure blow-out. This will happen more when converting to sRGb, and far less when going to ProPhoto.

To reiterate - WB is always applied after. The CCD sensitivity isn't affected by your choice of WB at shooting - it will only tag WB info in the RAW file, and convert the thumbnail JPG using WB.

Hope that makes sense!
Matt

Yep that makes perfect sense!
Thanks Matt