Mimetic Poly-alloy, or how the T-1000 works.

How does the T-1000 work? How does he turn liquid without giving off heat? If he's liquid, how does the molten steel hurt him? How does he time travel if he's liquid metal, and has no living flesh?
The answer is in the term "poly-alloy", and in the only possible answer of how he carries his intellegence in a liquid form.
Nano-technology. He's molecular.
Whatever metals are mixed together to make this exotic nano-substance, he must be made of complex molecular nano-strands that operate at the nano-mechanical level.
At this level, the line between chemical reactions and tiny machinery gets blurry.

To explain how he stores information, let me briefly sidetrack a moment.
Before the electrical computer there were mechanical adding machines. These proved to be cumborsome pieces of junk. But, at the molecular level, every gear and piston of such a computer would only be a few atoms big. It would actually be more efficient in some ways than a micro chip. So, the T-1000 must have a nano-mechanichal version of the Terminator chip melded into his molecular structure. This would explain how in the words of Arnie "the T-1000 contains the same files that I have". This molecule computer may even be copied gillions of times througout his molecular structure so his whole body is intellegent, and no doubt the nano-computers have some mechanism for futzing with the configuration of the poly-alloy molecules.
Now that I think of it, the whole poly-alloy explanation works better if T-1000 is all one liquid without any added ingredients.
After all, a working explanation should work solely with the native elements in the film, right?
All indications are that he's just one continuous liquid with no other force working on him.
So, I think these so called nano-computers are weaved into the polymers.
After all, Ahnuld says he's "a mimetic poly-alloy", not "a mimetivc poly-alloy with little nano-machines buzzing around in it".
So, the poly-alloy must be a software/hardware unification. Sort of like DNA.
Except poly-alloy can mimic what it touches, and contains a smart property that allows it to store patterns and programming alike.
This even better explains how not only the T-1000 can mentally morph his whole body, but also how all the little pieces of him that break off can intellegently reassemble.

Now, as to the temperture thing, extreme heat is our primitive human way of getting metal molecules to loosen up and melt.
The T-1000 can naturally unbind his molecules to behave like mercury and then ooze, then pull his molecules back together. It's done nano-mechanically without heat discharge. But on the flipside, these nano-structures would be fragile to the sort of methods we employ to futz with molecules.
Namely extreme temperatures. In the director's cut of T2, the liquid nitrogen damages T-1000's molecular structure, and he begins malfunctioning. We can still see evidence of this in the non-director's cut, when his face ripples. This seems to be the nano-molecular equivalent of TV static.
Then, it's the extreme heat of the liquid steel that whipes out his molecules once and for all.

Now, this is where I get to how he can time travel.
We also know from the movie the T-1000 can become what he touches. Apparently the poly-alloy can absorb the molecules (or DNA in the case of a person) of what it comes in contact with, and mimic it's molecular properties. So, if he can molecurlarly mimic flesh, then it does whatever flesh can do, and gives off the correct energy feild that allows him to time travel.

So there you are, all rolled up in a neat little package.
T-1000 is a smart-mimicking nano-substance that can copy all that it absorbs by touch, and can form flesh of sufficient quality to pass through the time displacer.
Just like they showed (and said) in the movie.
Just now you know what they were talking about.