I have used the ds18b20 in a few projects, its a usefull chip.
Yes the temp is stored as a hex value, and the fraction as a hex value, and that is affected by what resolution you have the device setup to.
I use a lookup table to work out the fraction of a degree, and a hex to bcd or ascii converter to work out the temp.
Do you have it wired up for 2 or 3 wire?
I couldnt be bothered writing the code so I stole it off the net, and it looks the same as the code you linked to, the only change I made was to make it so it didnt hang up if there was no reply from the sensor, and of course the section that converts the values to bcd or ascii.