It varies. If an llustration is used, it's more often than not, still placed into a computer file that is processed by the printer. Far and wide, though, most art is done by an artist on a computer (remember the software Photoshop) even if illustrations/paintings are used.
Likewise bands have a variety of options, depending on their contract and relationship with their label. They can often bring in a friend to do the work, or maybe a band member (or their great aunt) is an artist, the label itself can comission the work of a specific artist, etc. Ashaman is right, often, an artist has extra pieces that will be used on consignment basis.
By and large, in the metal scene, digital artists are employed... myself being one of them. The metal genre (and all it's variants hereafter) is an interesting one... some of the best digital artists and artwork is prominent in scene, and outside perhaps the techno scene.