Yes, I think that is one of their main purposes. It basically takes the impact energy and distributes it over a larger area and over longer time, reducing the risk of permanent brain damage. This website has some charts of a lab experiment showing the difference in the energy spike felt by the brain. http://www.bhsi.org/general.htm

I fell onto my bike helmet, on pavement, splitting it in half. I can tell you from personal experience that helmets definitely protect against concussion.