Also check out Michael Stonebraker's C-store:
C-store (includes links to source code and research paper)
The paper contains an excellent viewpoint on column oriented databases, that should answer most of your questions.
To quote the paper,
"Most major DBMS vendors implement record-oriented
storage systems, where the attributes of a record (or tuple)
are placed contiguously in storage. With this row store
architecture, a single disk write suffices to push all of the
fields of a single record out to disk. Hence, high
performance writes are achieved, and we call a DBMS
with a row store architecture a write-optimized system.
In contrast, systems oriented toward ad-hoc querying
of large amounts of data should be read-optimized. Data
warehouses represent one class of read-optimized system,
in which periodically a bulk load of new data is
performed, followed by a relatively long period of ad-hoc
queries. Other read-mostly applications include customer
relationship management (CRM) systems, electronic
library card catalogs, and other ad-hoc inquiry systems. In
such environments, a column store architecture, in which
the values for each single column (or attribute) are stored
contiguously, should be more efficient. This efficiency
has been demonstrated in the warehouse marketplace by
products like Sybase IQ [FREN95, SYBA04], Addamark
[ADDA04], and KDB [KDB04]. In this paper, we discuss
the design of a column store called C-Store that includes a
number of novel features relative to existing systems."