From what I learned from them, this is how algorithmic trading works at hedge funds (or any place basically).
You have PhD strategists/researchers who usually have degrees in physics/mathematics/computer science who come up with ideas and then research and develop algorithms based on these ideas. The algorithms are then backtested by the research team sent to the developers.
The quant developers (expert programmers) are the ones who implement these algorithms and then optimize the code to the best of their abilities. The algorithms have to be interfaced on some platform (TT usually) and the programmers take care of this part.
Then come the "traders" who work on asset allocation and execute these algorithms onto the market at specific times depending on the parameters stated in the algorithm in terms of volatility and so on. Most algorithms I have seen are market neutral so the trader's job is to just launch the algorithms onto the market when they open and then sort of "baby sit" or allocate asset to it accordingly in a risk management framework. Many a times it is a circular process. The traders since they are locked into the markets, will come up with ideas on trading and will talk with the PhD strategists who will refine and turn the idea into an algorithm, and the process starts again. From the few funds I interviewed at and got offers from it seems like the smallest number of algorithms (robots) a fund has run is around 800 so everyone is usually pretty busy. I recently saw one trader launch/manage/monitor more than 100 algorithms in the european markets.
There ARE exceptions to what I stated. I am just speaking from experience. I was working with a hedge fund last semester where it was just a trader/quant developer who were doing the algorithm trading. The trader came up with ideas and concepts and the quant developer would implement them. I have also met people who do ALL three at hedge funds (Silos) and they have had PhD's in EE/Math from MIT/Berkeley and other ivies/target schools. The triple hitters are almost always people who have done significant math and programming for a minimum of 5-10 years.