Yup, we end up taking the hit on art/promotion/other costs. So far the best screening process has been motivation. We haven't yet encountered someone who was motivated enough to finish a game with us and whose game was poor enough we didn't want to publish it. We help with game design and playtesting where needed as well.
The artwork can be used in versions of the game that live on different platforms, we will take a cut of any version that uses our art/music/characters.
Sounds great :) Have you thought about allowing people to buy out of this agreement if they want to be able to use your help to bootstrap/test and then move in the future?
We don't take any ownership of your IP. If you strip out our characters, art, music, sdk, you can do whatever you want with what's left. If you stick with us we want it to be because we're doing a good job as a publisher, not because we've taken ownership of all your IP.
Cool! If you want to chat about it shoot me an email at jeremy@makegameswith.us. Also happy to hop on the phone or Skype if you want to bounce ideas off someone or if you have any further questions you want to ask about what we do.
The artwork can be used in versions of the game that live on different platforms, we will take a cut of any version that uses our art/music/characters.