from what i understand they transfer the film footage to a digital format then edit it from there. But i also here that there are plenty of studios that do it the old way. But i am not a professional and edit all my stuff digitally so these are just guesses and things I've heard.

"Anyone who has ever been privileged to direct a film also knows that, although it can be like trying to write 'War and Peace' in a bumper car in an amusement park, when you finally get it right, there are not many joys in life that can equal the feeling." - Stanley Kubrick

Doubt there are many studios still cutting film: even Troma edit digitally these days :).

Usually you cut from a video telecine, and use that to cut the negative (or if you shot HD, you can go digital all the way).