index.php is the entry point for magento system.
this file checks the following
1. Includes the COMPILATION configuration file. This is for magento compilation process
2. Checks if app/Mage.php file exists or not, if not open the magento downloader.
3. Check if any maintenance file exists, and accordingly shows maintenance mode
4. Checks if any store/website code was sent, and accordingly run the website/store.
If no website/store was sent, it takes the base store.
And this finally calls