As you can learn in the cathedral in Fallout1, you seem concious when you are diped (as you wriggle a lot!). That video also shows that you mutate as soon as the FEV comes into contact with you. Im guessing that their past life was erased by the chemicals action on the brain, so it would have happened probably a few minuets after the mutations became aparent.
Of course this is all speculation, but then again Fallout is just a game, and it is what you make it.
In FO2 Marcus says that he can remember things about being human although he was dipped a long time before that. In theory instead of erasing your past life the FEV will make you think it was bad and being a mutant was better.