These services use a digital minilab, like the ones in the back of many photo-shops.

They print our digital image on ordinary photopaper, just as if it were an image comming from an ordinary analog film/negative. (actully, if you take an analog film to a photo-shop today and ask for prints, ther minilab will most likely:
1) Develop the film
2) Scan the negatives at high resolution
2) Print the digital imagefile)

The best you can do is to try it out for yourself.
Shutterfly currently has 15 free prints to new customers.

best regards

Ole