Do you mean that when you use CreateMesh(), AddVertex and AddTriangle and other 3D-commands, that this is processed by the CPU in Blitz3D instead of the GPU?
It's done with both. There is no other way, except with DX10 which is Vista-only.
When you add a vertex, is this vertex created in RAM or GraphicsRAM (RAM on graphics card)?
Again, both. It would make no sense to only have it one or the other. It's put together in system ram and then uploaded to vram when required.
Doesn't Renderworld use the GPU for rendering?
Of course, it uses the GPU for rendering. It's not a software renderer. That doesn't mean that it uses the GPU for skinning, or for occlusion culling, it appears to have no scenegraph and I'm not sure what it does in the way of vertex buffers, arrays, strips, trianglelists, etc. But still, it's not a software renderer.