I actually had a really great experience with my schools pre-med committee. They made the whole process of applying to med school really really easy and organized. You had to open a file with the committee during the beginning of your Junior year with a basic info sheet which listed all of your academic acheivements, research, voluteer work, and extracurriculars along with a compy of your transcript and a summary of any unique or important personal experiences you want to add in. They gave us a timeline for when we needed to ask for our LORs (which had to be at least two science, one non-science (w/ at least one from your major)--although you could have more if you wanted) and when the professors had to turn them in to the committee (this was by like march or something so you didn't have to worry about making sure profs got things sent out to schools correctly). They also required us to have drafts of our personal statement done pretty early and included in the file, although we could update them whenever we had a better version (there was even someone on the committee who would help us revise our statements periodically if we wanted it).
After all of the letters and info was put together it was given to one of the members of the committee (who were both science and non-science profs--the prof I had was a psychology and elementary education professor whose son was a doctor) who would reveiw all of the information and then give us an interveiw. That person would then write up a recommendation based on the interview which would be combined with all of the info and put into a committee letter with the assistance of the committee head. The committee head knew most of the people applying if not personally then at least by reputation. The compiled letter summarized and quoted the origional LORs, integrating that with your overall academic performance and other experiences and tried to provide an overall veiw of the competetiveness of the applicant (without any sort of actual ranking though). By the end of the school year you had to provide a list of schools you were applying to and when August rolled around the office automatically sent your letter out to those schools, if any got lost or misplaced all you had to do was call them and they'd send another copy.
I think the idea of a committee letter is to provide a more objective opinion which probably gives them more weight than the LORs people get from their own professors. The schools that send enough people to med school to require a pre-med committee will have a reputation with ad coms, as will the type of student that graduates from that school. The ad coms will probably trust the recomendation of the committee letters more than they could trust the opinions of random professors (or TA's) that could be of any quality and might not know anything about what it takes to succeed in medicine. Doesn't it mean a lot more if the pre-med committee head can say wow, this student exemplifies the perfect med school candidate, she was top of her class and really contributed to her major by doing X,Y, and Z while also voluteering and researching, etc....than it does for a professor you obviously liked and performed well for to say you did a great job in their class? The pre-med committees can't lie (or fail to point out your weaknesses) and make you look better than you really are because they have a reputation to uphold. If you get in because of a great recommendation and you aren't as great as they say you are do you think that med school is gonna go on accepting the opinions of that pre-med committee?
I think most pre-med committees started in order to make it look like their school was really good at preparing people for med school...if you weren't good enough the committee wouldn't let you apply. My school didn't do that (although I think they used to)...now they just meet with people who they think are borderline for acceptances an extra time and try to find out more about them to be able to perhaps find things to emphasize instead of poor grades or MCAT scores. They try to honestly present you in the best light based on all of the facts, including the more intangible qualities, but would never lie and say they highly recomended you if they didn't think you were up to the job. One of my friends who was acutally encouraged to wait a year before applying because of a low MCAT score (mid/low 20's--and she applied that year anyway) had her letter read aloud to her at one of her interveiws...she almost started crying because of the great things her profs and the committee wrote about her in the letter!! The interveiwer was blown away by the recs and that is probably why she got that interveiw...she was only interviewing for the waitlist though and didn't end up getting in off of it. One of my own interveiwers also commented on my committe letter and quoted a passage of it to me because he was so impressed with what my professors had to say about me.
It was reasuring to me when I was applying to have everything spelled out and explained to me so that I knew exactly what I had to do and when I needed it done. The guidance the committee provided was better than anything I could have gotten out of a book or even from people on SDN ( I didn't know about it at the time). I know every school's pre-med committee isn't as great or as helpful as I found mine to be, but if your school has one make sure you use their resources to get as much help and info as you can.