The new system does what you suggest. Command-S creates a new "revision" in versions, and you can select "Revert to > Browse all versions" to see all versions of your document. OS X also automatically creates a new version once an hour if there are new changes.
The saving algorithm happens near-instantly, yes - but what's being referred to is the "versions" that are user-visible. Each time you hit Save, Close, or leave an edited document open for an hour, a "version" made that can be reverted to/seen in Time Machine.
