What is my chess engine doing?

I recently got Fritz 10 and have been using it to play against (frustratingly), to work on opening, and to look at my own games and try to see the stuff I'm consistently missing.

I'm curious as to what the chess engine is actually doing however. As it analyzes moves, does it rate them according to the value of the move (the discrete move), or the final value of the variation it builds?

The number you see in the parenthesis is the complete evaluation of any given position in pawn values. Meaning +1.50 means white is a pawn and a half ahead in material/position and -1.00 is black is ahead by one pawn. Naturally the greater the # the greater the advantage.

I just ordered this today, because I am also interested in getting some more in depth knowledge of what is going on with my Shredder and the other popular chess engines....     http://www.chesscentral.com/ProductDetails.asp?ProductCode=3013690&gdftrk=gdfV2893_a_7c91_a_7c217_a_7c3013690

But is the given position being analyzed in pawn values the position after the first suggested move or at the end of the variation?

As an example...

in a certain position that I enteded into Fritz, this was the best line given:

1. (plus over minus)  (0.82) : 1. d4 exd4 2. Nxd4 a6 3. Bxc6+ bxc6 4.Nxc6 Qd7 5. Nd4 Nf6 6.Nc3 d5

Now is the 0.82 (white up .82 pawn values) reflective of the position value after 1. d4 or after 6...d5?

Well, I believe it works like this (though I'm not an expert on this stuffy by any means) -- The engine is saying that at the position it expects to reach with best play (6...d5) the 1.d4 line is 0.82  ... so in one sense it's an evaluation of the end of the line...

However, does that mean if you set up the position reached at 6...d5 you can expect a 0.82? Almost certainly not... At that point the computer is looking deeper into the position and will be basing it's evalution on a deeper look into the position. 

6 moves is 12 ply... which is a pretty shallow look for a contemporary engine. You get noticeably better lines letting the computer run to 17 or 18 ply (at which point they tend to be going pretty slow it isn't practical to go for much deeper unless you plan to let the computer run overnight) ... the last moves in these deep lines are notoriously unreliable although the evaluation for the first move is more accurate. (Which is odd when you think about it).

That makes a lot of sense, thank you for your response. I do however still wonder...

even at 12 ply (as you said a relatively shallow look), that means that the computer is assuming that your opponent will play "best play" 6 times in a row. It seems unlikely at all but the highest level that any player will play perfectly 6 moves in a row. Doesn't this fact essentially nullify the exactitude of the "pawn value" because there is a very high probability that that variation will be deviated from?

I know this stuff is pretty complicated, someone tell me if I'm thinking about it all wrong...

The pawn value is... "playing this move should leave you no worse than: 0.82"

One should never think of chess engines as 'exact.'  A computer needs to think it is exact in order to properly function, and the creators make more money if their reputation is one of exact, but they are anything but.  That goes double in the opening; that's why chess engines generally come with opening books.

Think of the (0.82) score as a fairly intelligent guess at the current value of your position by an experienced friend (more or less experienced depending on your computer's power and the time/depth you let it think).  I also wouldn't think of the score at ALL until the game is leaving the opening.