All my palaeo-art is digital based, and will invariably involve 3 dimensional modelling in the program Carrara.
Any prehistoric creature you see in my work will go through the following steps. In pieces where I've built the overall environment all the plants, landscapes, and other elements were made like the example Dinosaur here too.
Step 1: Modelling
I first must build the creature or object. While this visualize isn't a completely accurate view of how I work on my models, it should give you an idea of conceptually what I'm working with.
Functionally I'm creating and working with 3 dimensional sculptors in the computer. So while I have the advantage of having a whole animal (or whatever I'm building) to work with, I also have build the whole animal. This adds time to the process, but has the added bonus once I've built something I can reuse it as many times as I'd like.
Phase 2: Pre-Shading
Phase 3: Shading
Phase 4: Lighting
Phase 5: Compositing
Phase 6: Photoshopping
Finally for many of my pieces some tweaking or alterations in an outside graphics program can be unnecessary. I use Corel Paintshop Pro for the majority of this work.