Textures go into video memory. If not enough video memory is available, I think it uses regular RAM. As far as computing it, that I don't know, but I suspect it's the GPU (graphics processing unit) as the CPU isn't entirely designed (for speed anyway) for this sort of thing.

As for the "many parts" thing, you could make use of the multi-texture feature in the new MED for this and still only use one model.