In my experience it does not. You will need to compile the SASS to CSS separately. With compass you can set it to "watch" the sass folder for changes and constantly recompile -or- you can run the compile command manually. To run it manually, start a ruby command line, then
Or to start the watch command
compass compile [path/to/project]
I used watch for a while but found it took quite a while (20-30 seconds) to recompile each time, so I just started doing it manually when finished.
compass watch [path/to/project]