When you create a Universe and save it they are stored in the PC where its created unless you Export the Universe to the Repository from Designer or Supervisor... Once the Universe is Exported then its stored in the BO Repository... Again BO Repository is nothing but a series of Tables which BO uses and they can be in Oracle, SQL Server etc...
Sri summed it up nicely.... The reason the repository is used is so that you don't have to distribute universes to users.
When they access a universe from their desktop, BO checks to see if a more recent version of the universe is available. If so, it automatically downloads it for them.
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