Saffy, yeah, if the end result is not identical, then the software used is doing something very wrong indeed (i.e. corrupting the data when decompressing it). The process is the same as playing the files, e.g. before burning the burning application has to decompress the files into memory. So when the actual burning takes place it reads uncompressed PCM from memory and puts it on disc.
I think the confusion comes from the idea that the file is "compressed". It sounds bad, we don't want compression do we.. But, a losslessly compressed file is only compressed while stored on your hard drive. As soon as you want to DO something with it, like playing it or burning it to CD, the file must first be decompressed to its original raw PCM form. And, all lossless compression algorithms have been verified numerous times; they indeed reproduce a bit-for-bit copy of the original PCM data. This is in contrast to the popular "lossy" algorithms like MP3, WMA, AAC and countless others, which apply psychoacoustic models to the music and permanently removes "redundant" information. These files are certainly not identical to the original, and there is no way to reproduce the original bitstream but rather an approximation. When people talk bad about compression, this is often what they're talking about, and that I totally agree with! :) Lossless compression however, is just what it says: it loses nothing.
I had a look at the Genesis web site but couldn't find anything related to compression there. Do you have a direct link to where he talks about this? It would be interesting to see. :)