It looks like the link was for Sprung and Delbeek's books...probably The Reef Aquarium volume 1. It is a three part series. Excellent books.
Another great series of books is Fossa and Nilsen's The Modern Coral Reef Aquarium. This is a 4 part series.
And, to answer the question, the zooxanthellae resides in the ectoderm of the coral tissue and Yes, Corals still photosynthesize, even if the polyps are not out.
Scott