Yup, that's exactly the point. Instead of wasting energy (that's already been put into the car to get it moving) during braking by converting momentum to heat (friction between the brake pads and the rotors), the electric motor is used to slow the car down resulting in the energy being converted back to electricity to charge the battery instead. The car's computer decides how much the generator vs. how much the brake pads control speed for each given situation.

I don't know how efficient it is (how much energy is actually recaptured compared with what went in to get the car moving), probably not a whole lot, but better that heating rotors and making brake dust. Plus, it does sound cool! As I habit, I try to feather the brakes when appropriate in thinking that I'm mostly slowing by the electric motor and not using much, if any, brake pads in the process. When you feel the car just about to come to a stop, I believe you can feel when the motor lets go and only the brakes are working (around 2 or 3mph I think).

Two climate control systems, one inside and the other at the tailpipe.

2007 Camry Hybrid (in service June 2006)
FE: 6.77L/100km (34.8 mpg) over 37750km (23450mi)
75% city - Ave trip 20 min - 2 Winters