What do hardware engineers do?

Hello /prog/,
Could you please explain in ways a software engineer would understand what exactly do hardware engineers do? I've heard of languages such as VHDL and Verilog, are they actually used or do they draw circuits manually? Do they test hardware through emulation or do they use FPGA? Is a VLSI chip just a big ASIC?

I have dreams where hardware engineers get together and try to make their architectures as hodge-podged and overgrown as possible. When they get bored of that they go and torture the language in their specs and hide outright falsehoods in the most important parts of the reference manual.

They may or may not actually do any of that; I really have no idea. The results seem to be about the same either way.