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http://cyclehelmets.org/1209.html
How cycle helmets work
The principal protection mechanism in a cycle helmet is the polystyrene foam, or styrofoam, that covers the head. When this receives a direct impact force, the styrofoam is intended to compress and in this way spread and reduce the force that is passed onto the skull, thus reducing linear accleration of the brain.
However, it is common for helmets to break without the polystyrene foam compressing at all. A major helmet manufacturer collected damaged childrens' helmets for investigation over several months. According to their senior engineer, in that time they did not see any helmet showing signs of crushing on the inside (Sundahl, 1998). Helmet foam does not 'rebound' after compression to any significant extent. If the styrofoam does not compress, it cannot reduce linear acceleration of the brain. The most protection that it can give to the wearer is to prevent focal damage of the skull and prevent minor wounds to the scalp. It is not likely to prevent serious brain injury.
This helmet has split along the ventilation slots, which is common. However, the thickness of the styrofoam has not been compressed.
It most likely gave no more than superficial protection.Some dissipation of impact force might occur from the action of a helmet breaking, but in most cases this is likely to be small. Helmet standards require the foam to start to compress at a level of force less than that which might be expected to lead to brain injury. While it is known that many helmets do not actually meet the standards to which they are supposed to be accredited (BHRF, 1081), it follows that if the styrofoam does not compress at all, the direct linear force on the helmet was minimal and it's quite possible that the cyclist would not have received any injury if the helmet had not been worn.
If the styrofoam is compressed, it still doesn't prove that a helmet had a protective effect. This can be demonstrated with a fist and a brick wall.
If you 'shadow box' at the wall but carefully stop your fist about 50 mm before it reaches the wall (be sure it's limited by your arm's length), no harm will come to your fist. If, without changing your position, you slip a 75 mm thick piece of styrofoam against the wall and repeat the punch, you'll get compressed (and cracked) styrofoam and false 'evidence' that it saved you from harm. In other words, many impacts of helmets would be near misses with bare heads.
In high impact crashes, such as most that involve motor vehicles or fixed objects like concrete barriers and lamp posts, the forces can be so great that a helmet will compress and break in around 1/1000th of a second. The absorption of the initial forces during this very short period of time is unlikely to make a sufficient difference to the likelihood of serious injury or death. It is for this reason that helmets contain stickers noting that no helmet can prevent all head injuries.
Yes, my head would've likely miraculously stopped millimetres from the ground rather than continuing on its inexorable path to the ground like the rest of me and my bike. :)