If I have a pipe masked as "source" for example. If no data is flowing
through that pipe and out the WAN interface, then there is no pipe set
up...since it is a virtual pipe.

But if data flows from a computer into my Monowall on the LAN input, and out
the WAN interface, then a virtual pipe will be created for that data. 

I assume if another computer also has data flowing into the LAN input on my
Monowall and out the WAN interface, I understand that another virtual pipe
will be created.

My question is:

What in M0n0wall senses that a new virtual pipe has to be created?   Does
M0n0wall see a new IP address, and thus starts up another virtual pipe?

Thanks