Touchwiz is not a launcher, well not really. Touchwiz as a whole would completely replace the android launcher, ie: the android launcher that is on a stock device is literally not on a touchwiz phone, nor is it on a sense phone.
You might be confused on what a launcher really is. It's basically the interface that you use the phone with. It's true that samsung also replaces or adds applications that would be in stock android but much like microsoft word is not an operating system, the phone dialer or the email client are not the launcher.
So basically, when you load something like adw, or launcher pro, you do still have the touchwiz launcher, but when you set it to default, the phone will use the launcher program you downloaded instead.
For example, launcher pro has more flexibility with the dock. I can have scrolling docks (where you swipe the dock and a new set of dock launch slots are available) or have gesture actions from the dock. That is, the dock is not just a touch the icon to make a program launch, I can swipe that dock button up, (adw also supports down swiping I think) and an entirely different program or shortcut can be activated. I have more options for the home screens, and there's a bunch of other stuff as well. I suspect most people use custom launchers because they have more customization options than the regular launcher does. Personally I like them because they allow me to use fewer home screens, and I almost never have to go into the app launcher. I only use 3 home screens, but I could probably also get away with using two. I just happen to like to keep the home screen relatively clear of stuff (only 4x1 widgets on it) because I like to have a hot girl as my background.
Oh yeah, another big plus....a lot of the launchers allow you to modify the grid size settings, or even resize widgets that are not normally able to be resized. That is, I can have more icons on a screen with launcher pro than I could with the stock launcher, and an example of resizing a widget is that I can stretch or shrink the google voice widgets to either hide information, or make it so I can read the entire voicemail all from the widget.
If I don't want to use that launcher application anymore, maybe I'm bored of it, maybe I don't like how it works.....just like a replacement text messaging app, all I have to do is either uninstall it, or set it to no longer be the default launcher program, and 2 seconds later my phone works however it is then set to.