Bruce,
I run dual monitors at work and at home and have done so for about 12 years. To answer your questions:
1.) Advantage is more space. For multiple application windows and in some cases, multiple views of a design. For AD there are few advantages but I also use MicroStation which has two application windows so I can fill both screens with different views of my design.
Even when I'm not using MicroStation, I can leave my e-mail up on one screen and work on the other. Or I can have AD on one screen and Excel and e-mail on the other. Alt-Tabbing between applications is history for me.
2.) There is no switching between screens. As fas as Windows is concerned it's all on BIG, happy desktop. Mouse moves seamlessly from one monitor to the other and back again. You can also drag application windows between the two monitors with no problem.
3.) To me, it is definatley worth the cost. However, the cost is nearly negligible today. Almost all ATI cards are dual monitor capable and the cost of a 17" or 19" CRT is less than $200!!!!
Karl