With one notable exception, the misinformation in this thread is a bit scary!
Rather than try to write my own mini-article, I would point the interested reader to the excellent TechNet resources at http://technet.microsoft.com/en-us/library/ms189271(SQL.90).aspx
The articles under that root are some of the clearest and best explanations I have seen.
/Paul
edit: broken link
Paul White
SQLPerformance.com
SQLkiwi blog
@SQL_Kiwi