the modles painted by Eavy Metal are kept in the Studio, and used for box photography, white Dwarf and rulebooks. also, they get shown at Gw events like Games Day, and on a smaller scale, the open days and foreign grand tournaments. The models stay property of games workshop, no models will ever be \'returned\' to the painters, since they get paid a monthly wage to paint the models for gw. GW doesn\'t like the idea of selling of old tudio property, mainly because it would be more trouble than it\'s worth.
They are kept in the studio, and although you wouldn\'t think it, are constantly in use for photograhpy, or battle reports(yes, they use the cooly painted ones to actually play the games)
When a range gets obcelete due to re-release, the old models are archived, and in some cases, single models are given away as gifts to shareholders, business contacts, special guest of the studio(christopher lee and the other lotr actors/peter jackson spring to mind) and veteran employees.
In the end, the models that can truly not be found any more use for, are given to games development, to use and abuse for playtesting.