I presume the bottom of the bag is triangular shaped with the hose coming from slightly above to allow particulate matter to fall to the bottom and not clog the filter unnecessarily. Am I correct in this assumption? And how well does it work?

Yes, large particles do settle in the bottom of the bag, and there is also a fine mesh filter over the output. As far as the Platypus clean stream I feel the MSR is the better system for several reasons. The filter elements are exactly the same, but several other features makes all the difference. One, the MSR has a large nylon strap with a buckle that allows you to strap it to any tree you come across, but the Platypus simply has the handles on the bags. Second, the MSR has a universal addapter so you can use it with the reservoirs or bottles you already have. That way you don't have to carry around a "Clean Bag" that serves no purpose but to temperarily hold the filtered water. Third, with the roll top on the MSR bag you can pressurize the bag by continuing to fold the bag over and over on itself. This helps you force water through the filter, and I find it helpful if I am refilling my reservoir on the go while it is still inside my backpack. I think these three differences are what sets the MSR filter ahead of the Platypus, but as far as filtering the water they are exactly the same. Some may feel different, but that is my two cents!

Your assumption is correct plus any smaller particulate matter will be filtered out. This type of system works great by performing all the filtering automatically. Before you make a decision, check out the Platypus Cleanstream made by the same great Cascade Designs company. It works by the same principle but gives you more options. Here's more information: http://www.backcountry.com/outdoorgear/Platypus-Cleanstream-Gravity-Filter-System/CAS0453M.html