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Consider the following diagram from this link:
If I am correct, here's how I see it geographically:
The workstations and modems are on the customer premises. The DSL links are part of outside plant. The DSLAM is located in the telco central office. The router and the file server are in the same building (data center?).
But where are the ATM switches and links located? Where can you see the ATM infrastructure in real life?
DSLAMs are usually placed as close as practical to the CPE -- because it's distance constrained. So they can be in someone's yard, hanging on a pole, buried in a vault (CEV), or in a nearby CO. The upstream connection to the DSLAM could be going almost anywhere -- T-carrier and OC lines aren't so distance sensitive. In my experience, ATM (and frame) switches, and multiplexers, are in COs (or remote offices.) They are interconnected in a loop ("ring"), and/or mesh. The broadband aggregation router(s) (BRAS) can be anywhere (CO, RO, DC, closet in a shopping mall...); they just need power, and links to the ATM network and IP network.
(Ours were in major COs, as were the four (4) ATM switches. Frame-relay switches were in every CO.)
Note: as these are layer-2 technologies, they cannot be detected by traceroute. The only way to know about them is for the operator(s) to tell you about them. As you have zero control over them, you rarely need to know about them. [You're paying someone to connect point A to point B; how they do it isn't your problem.]
DSLAMs are located in the vicinity of the CPEs/modems, usually within a PoP/local exchange (the DSL links are a few hundred or thousand meters in length). Long distance is covered by ATM.
In your diagram, ATM switches could be located between the ATM router and the DSLAM. That router likely feeds a number of DSLAMs. Also, the distance between those nodes may require switches in between for regeneration.
Note that PPPoE is run as an application on top of an ATM/SDH network spanning an entire region (e.g. a country). Also note that SDH has largely been replaced by Ethernet and that ATM is just used for framing, as a legacy protocol (if at all).
