translation problem: __() in category.php

I’m trying to translate some taglines in my blog from English to Dutch.

On line 19, in category.php it says:

__( 'Category Archives: %s', 'twentyeleven' )

I’m confused about what __() exactly does and where it is ‘defined’.
In the codex (http://codex.ww.wp.xz.cn/Function_Reference/_2) it’s says it’s an alias for translate() which should be located wp-includes/l10n.php.

I’m sorry but i guess i don’t have that file :S

To concretise my question a bit:

1) is the text ‘translated by __() category archives: or %s and where is this %s coming from?

2) Should i just change ‘category archives’ in dutch, and what about %s

3) should i change something somewhere else in a list of translations for example

thanks in advance