Just to make sure you are understanding how the client works:
 - When you click "New" the client is grabbing an address from the key pool and, if necessary, subsequently generating a new address (that you don't yet see) to bring the keypool back to its target size.  So yes, the KeyPool is replenished each time you click New.

So the wallet holds all addresses including the "used" ones given to you when you clicked "new" and also all the "unused" ones from the key pool.  And just to clarify ... I'm referring to an address as "used" not necessarily to mean that it has been used in a transaction but instead just that it is no longer an "unused" address in the key pool.