Map generator
Generation
The map generator (world generator) is based on modificated Perlin noise algorithm. A more detailed description is in the API docu.
Article, which describes the generation.
Starting area
To have the maps not totally unfair, you can define also the size of a starting area, which tries to set all most needed resources in a small area.
Generating when exploring
The map is endless (if not defined with limits). However the whole map isn't generated from start. A new Chunk of map is generated, when explored. This means you come to the current visible borders and then the needed chunks are generated. Or you placed some Radar.
Map seed / Map Exchange String
http://www.factorioforums.com/forum/viewtopic.php?f=5&t=6447&p=50336#p50318
Map Seed - random number generator seed
Map Exchange String - All settings for the map creation (Map Seed, settings for resources, settings for size, etc.)