Having worked as a concept artist in the past, I can confirm that you don't use concept art in the actual game. The concept art is a painting or sketch that sets the mood, or shows what a character or a scene in the game is supposed to look like. It can be a beautiful piece of art, but it's not optimized for actual use in a game (no defined edges, for example; in the game you may want a character to be able to walk behind stuff on the screen, and if you used a watercolour painting (for example) as the background you'd run into all sorts of practical problems).
So yeah, TimovieMan - you're pretty much correct.
