Neither of you heard wrong. This is what happens after your interview:
Both interviewers write up a review regarding you.
This completes the application, and the application in its entirety is sent to the committee members who include your interviewers. This is the first time that your interviewers have access to your file.
All committee members read applications and give them some sort of a score.
Committee meeting is held. At this meeting, all the candidates are put up on the screen, listed in order of their combined scores by all the committee members. This is a temporary list for them to work off of.
Usually, [This is what JimmerJammerMK heard.] those at the top of this list are not debated about and they are accepted. Those at the bottom are sometimes rejected, but Dr. Wofsy reminded us that almost always, your interviewers will stand up for you if you're at this end. The middle of the list is further discussed and debated.
At the end of the meeting and after all discussion, each interview committee member gives a new score to each applicant, including everyone on the list. Those at the top tend to stay at the top, which is why they are accepted. The others can easily move around. From this finalized list, the top 1/3 are accepted, the middle 1/3 are waitlisted, and the bottom 1/3 are rejected.
Hope that helps!