From my point of view the brakes appear to work much the same as in a real street car. In a real car you can refurbish the rotors and pads, but the car still takes just as long and as far to stop during panic stops.
What the game adds is the ability to balance the brakes. In a scale of 0-100, you can move the brake force to the front or rear, and this does have an effect on how the car decelerates.
The key to this is that the front brakes always provide the most braking, but unknown to many, this is dependent on the suspension spring force. If your front springs are too hard, the brakes will lock and the car will skid farther. Springs too soft, and the car will over brake and oversteer spinning you. This is due to the weight transfer from back to front during braking. You need to find a happy medium here.
If you care to try this, add lots of braking power to the rear brakes without changing anything on your car. Make a high speed entry into a turn and you'll see your car fishtailing out of control with hard braking. Do the opposite and you will feel lots of overtseer.
Another tool that the game adds is the ABS. The ABS principle is based on the fact that when a tire locks it looses traction. The magic is to keep the tire always in contact with the road to a full stop. ABS brakes sense when the tire begins to skip and adjust the braking power accordingly. If you combine the braking balance with the spring force and the ABS you can improve the braking capacity tremendously.
If you are a league driver you will find that some guys that are consistent winners have mastered the braking issue. They can dive into a turn and touch the brakes lightly making time through the turns. Those like me that are not so good at it can only make up time on the straights.
I hope this adds a little clarity to the braking issue.