Tony, I can confirm that this is how GV has always worked for me as well. All my calls go out on my Google Voice number and appear to the people I'm calling as such. GV, the way I've understood it, never uses your data connection for the actual phone conversation (except through the GMail interface on the web), and always uses your voice connection and minutes.

However, Rob, I have noticed once or twice, that despite having that setting you show turned on, I've discovered that the person I'm calling sees my cell phone's number and not my GV number. This is annoying, since like you guys I don't want anyone to hold onto that number because one of the great things about GV is that it doesn't matter what your cell's number is