Here's an example illustrating how it works:
If you convert $50,000 to a Roth IRA and elect to have 20% withheld for taxes, your conversion results in only $40,000 going to the Roth. The other $10,000 goes straight to the IRS. The $10,000 never gets converted and is technically a withdrawal prior to the conversion. If you are under 59 1/2 and no exception applies, there is a 10% early withdrawal penalty on the money that was sent to the IRS. In addition, the entire $50,000 counts as ordinary income for the year.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.