Yes, it has to be a preview because the adjustments you are making are not applied to the image file. They are stored in the Catalog. So the preview is used to display what the image will look like when exported.
I don't know Jim - just watched Julieanne Kost's video on optimizing performance @ The Complete Picture with Julieanne Kost - How to Optimize Lightroom 5 - YouTube and when she talks about the Develop module, it sure sounds to me like LR's referencing the original file somehow in the Develop module, not a preview...
Well then, I guess you had better go by what you saw in the video. However, if Lightroom leaves the original master images in their original state, not modified, then if the develop image that you see isn't a preview how do you propose that Lightroom is showing the changes?
I just went back and reviewed that tutorial again. Notice that the develop module has to convert the raw file from a black-and-white image to an RGB color image, so it is essentially a preview that is stored in the Camera Raw cache. It isn't a preview on disk as such. But it is a generated preview. Every time you display an image in the develop module all of the adjustments that you have made to the image have to be read from the catalog, unless that image is in the Camera Raw cache. So if you have looked at a lot of different images and go back to one the preview has to be put into the cache. It's kind of a different concept to get your head around. But it is a preview.
Ok Jim - found this here: Optimize performance
Increase the Camera Raw cache size
Every time you view or edit raw images in the Develop module, Lightroom generates up-to-date, high-quality previews. It uses the original image data as its foundation, and then updates the preview for any processing or adjustments that have been applied. The process is a little faster if the original image data is in the Camera Raw cache. Lightroom checks the cache for the original image data and can skip early stage processing if the image data is cached.
So that's it - yes, it is yet another preview of our images.