I think the needle is positioned to reflect the relative bearing in the display which will show the QDM if the needle head is read against the compass card. Aa far as I know the relative brg for the VOR needle is just processed info. The QDM/QDR is known from the VOR receiver info so it's not difficult to calculate the relative brg if the hdg is known. Now, how the 737 IRS computes the true hdg without any magnetic input is IMHO the really impressive bit!