Letters of recommendation may be submitted online by your recommenders at any time after you start your online application. It is strongly recommended that you waive or decline to waive your rights of access to your letters of recommendation (using the online application system) BEFORE you start inviting recommenders to submit their information for you.
Do graduate schools care if letters are confidential or not? In general, graduate programs prefer confidential letters. Admissions officials say that it displays more confidence on the part of the applicant if letters are "confidential" (meaning you, the applicant cannot see the letter). The Letter Service is required to indicate on the letter if it is confidential or non-confidential.