Upload iTunes

You can think of iTunes podcast directory like “Google Search” is to your web site. All the syndication (your podcast feed) and your media files are hosted by you. All iTunes does is ping (check in a 4 hour interval) your podcast feed for new episodes. When it finds a new episode, the directory listing is updated, all the links that are in your feed that link to your media files remain. When someone downloads your latest episode, they download it directly from you. iTunes is merely acting as a proxy to allow your syndication of media directly to its users.

I hope this clears up how it works?