Yeah, I guess we're still old school in that we designers build the levels (good old brush work). We just put in requests for models and textures we need.
Building process....I guess I get an idea for a layout and kind of sketch it out in Radiant, just rough it out with blocky masses or prefabed buildings from other levels to get a sense of size and distance. Then run around it in and see how things look. Then check it in and get people to play it so you can see how it holds up (and not listen to the wise-ass's telling you it doesn't look done)
Theres more to it but that is the start.