Docs are stored in SQL Server not on the file system.

So there is no way I could go to a folder  to "see" the
actual file by going into the Sharepoint Portal server
( SQL MSDE and SPS are on the same server)

It's on an extended virtual server I believe.The folders don't seem to "show
up" like they would on a server running a frontpage website on 2002
extensions etc. Since everything on the sharepoint  site is a part of a SQL
database of one type or another. At least, that's what I think.

Not really. It is in a binary field in a table. Outside of the web ui or
a web dav look it is for all practical purposes database info.

What are you trying to accomplish by actually "seeing" the file?

Thanks so much for your reply, I am trying to backup
and restore some of the files uploaded on the
Sharepoint without using 3 party backup applications,
I know Backup Exec 9.01 now has a agent for
Sharepoint.

You can "see" the Doc in a familiar explorer style structure using FP
2003. The actual file is stored as binary in the database... On that
topic, does anyone know of an easy way to restore a single file? I think
Sharepointexperts offer an undelete program, but I am wondering if
anyone else has any other (free) ideas.

This is exactly what I like to do. Suppose I enabled
shadow copy on the SPS 2003, Which file(s) should I go
after If I like to restore ( undelete ) it(them)

What do you mean by "enable shadow copy"? SPS doesn't have any undelete
functionality OOTB, and backup/restore is handled through the spsbackup utility.

Sharepoint and WSS both have tools to do backups. The smallest unit of
backup is a site collection and I think this is dependent on how you
design the system. There is no single doc restore out of the box. Shadow
Copy as far as I know only copies files and practically everything in
SPS and WSS is stored as records in the database so Shadow Copy will not
work. I am not sure if any of the Backup/Restore vendors have created a
single file restore utility as of yet. I do know that SharePointExperts
has a single doc restore utility, but I have not worked with it yet.

There are a couple vendors with single item restore - AvePoint and Vertitas come
to mind, though I think Veritas is only in beta at the moment.

Thanks so much for your insight. If I use "Add new
network places Wizard" to add the sharepoint  portal
server by entering its URL, I could "see" all the file
structures ( folder  tree ) from there. Unless I want
to manually copy those files, backup on these files
won't work. I guess we need to use the SPS built in
backup/restore utility to backup the whole data or use
some of the 3rd party utilities.

Yep, using the network wizard to creat a new folder  is just a fancy way
to display the "folders" sitting inside the database. Again if you
check documentation you should be able to design the system to create
more smaller backups thus making it easier ot restore to a box to copy
off a single file.