Query Regarding init search


I am getting confused in this :

How does a decompressed kernel comes to know about the location of the init or I should say Root file system…?
If on beagle board-xM I put MLO, U-boot, u-image on SD card and put my root file system on Pen drive then what changes will be made in boot process…?
I am studying BB-xM and I am on initial level. Hoping for some guidance from your side.

Thanks & Regards

Manoj Kumar