Since you mentioned "AFAIK", I thought I'd fill in some more details.
The Win32 API has separate roots, using letters and @. The underlying "native" OS uses a common root for named OS objects that includes files and many other things. The Win32 function you call takes care of qualifying names that are relative to a current directory and/or drive, and also takes care of drive letters, turning it into a full Native name. The drive letters are named symbolic links in a known place which seems to vary with Windows versions. In XP-64-bit, I see "\GLOBAL??" containing "A:" as a link to "\Device\Floppy0", etc. The "\Device" stuff is not accessible to Win32, but to drivers. It is like the Unix device directory, except it doesn't make it look like files in a file system. It's a tree of heterogeneous objects.
Are the native names that you are talking about canonical? Is there any way for a user-space program to obtain the native name for a drive or mounted folder (http://msdn.microsoft.com/en-us/library/aa364041.aspx)?