In Panels, how are the 2 given arguments in System's node_view created? In the Panel pages for System node_view (Node template) and term_view (Taxonomy term template), there is a variant that is already defined. This variant has 2 arguments, "Node being viewed" and "Depth". How are these arguments created?

thanks, 

Eric J.
Panels has by default some operations on url arguments which can create variables used in Panels. The short explanation is that Panels for nodes does a node_load on the node id which is part of the url: node/[nid]. It does something similar for taxonomy terms, only depth isn't the term itself, but rather information about it.

You can do this yourself if you create a custom url with placeholders, like my-panels-url/%node and assign the variable to be a node or taxonomy term.