Apply css style sheet to Sharepoint master page has 2 ways:
1. In the header section, you can add any custom cascading styles sheets by using a simple link tag.
2. Use <SharePoint:CssRegistration> tag. This approach offers a few advantages because you have an option to use SPUrl, which returns the URL of the current site. css style sheet of this approach is stored in the Sharepoint content database instead of file system.
Example:
<head runat="server">
<asp:ContentPlaceHolder runat="server" id="head">
<title>
<asp:ContentPlaceHolder id="PlaceHolderPageTitle" runat="server" />
</title>
</asp:ContentPlaceHolder>
<Sharepoint:CssLink runat="server"/>
<!-- Product Group Custom Styles -->
<%--SharePoint:CssRegistration name="<% $SPUrl:~SiteCollection/Style Library/PG/PG.css%>" runat="server"/--%>
<link type="text/css" rel="stylesheet" href="/_layouts/1033/styles/PG/PG.css" />
<!-- End Product Group Custom Styles -->
<asp:ContentPlaceHolder id="PlaceHolderAdditionalPageHead" runat="server" />
</head>
http://msdn2.microsoft.com/en-us/library/bb727372.aspx