I know that WLPG embeds regular tags into the image files themselves, but does anyone know if "people tags" are stored in the photo as well? If so, can you provide a link to some kind of documentation that shows this?
Yes, they are stored in the XMP data on the image.
See for reference this MSDN article: http://msdn.microsoft.com/en-us/library/ee719905(v=vs.85).aspx
Yes they are... BUT!
As mentioned above, People tags ARE embedded into the files using XMP. However, face recognition (and associated metadata tags) are a bit of a mess right now in the sense that there is little use of standard tags by different vendors. What that means is those tags are stored in your photos (great) but they are totally invisible to any other application other than WLPG (not great). The same goes with Face Recognition in Google Picasa and iPhoto/Aperture.
The work around is to make sure you also add "normal tags" (keywords) with the names of the people identified through face recognition. That way, they are also embedded in the image metadata using a more recognized standard (like IPTC:Keywords and XMP-dc:Subject).
See the following link for the gory details on Face Recognition Software and metadata (http://www.happydigitalphotos.com/face-recognition-software). I also have a summary of what metadata standards are used in general by various software applications (http://www.happydigitalphotos.com/photo-management-software/metadata). If you find something different or wrong with this info - please let me know!