Are FBX files part of a build (or converted)?

I was wondering whether or not prefabs that used .fbx files were converted to an internal file format during a build or were brought along as the copies of the files themselves?

If the files were not converted to a Unity internal format, would it be better to have all my models built into one .fbx and just make separate prefabs in Unity (rather then having a unique .fbx file for each model)?

I would like to know this also

independent on if they are converted or not (I guess the are, was mentioned somewhen, but not sure if it is only for iphone and web or all builds), the single mesh approach is a bad idea as you will get problems if you want to have animations, you will have problems with the materials potentially and you will near definitely run into the max triangles vertices per mesh restriction (16bit indices → 65536 )

Thanks for the replies, I do hope they are converted as I often have quite a number of custom properties built into the .fbx files that would be unused by Unity (but could be used for other postprocessing). I suppose I have been reading up on too many iPhone optimization techniques of trying to combine as many elements for minimal draw calls, but if it will be a significant performance gain I am willing to trade convenience for speed.

you would not reduce any draw call unless all use the same material anyway.

FBX files are converted and optimized for display at runtime.