Advantages:
-Opens up the upper body to improve breathing.
-Improve leverage on climbing.
-Helps save your hands/shifters when crashing.
-Looks cool.
-L shaped bar ends can shield your hands from hitting branches.
-More hand positions.

Disadvantages:
-Good ones are real expensive.
-Added weight.
-Some people never use them.
-Short ones can catch the branches.
-Might not fit all handlebars, or might crush them if not installed
 properly.
-Moves all the equipment mounted on the bar closer in.
-If an end plug is not installed, bar/bar end might be inserted into the 
 rider's body.

Position:
-There is no exact formula for this.  If you have never used bar ends,
 try them at 45 degrees first.  If you find your hands are too far 
 forward, move it up, if it's too far up, move it down.
-Everybody uses a different angle, from flat to vertical.  Most people
 use them at an angle between 45 degrees to 5 degrees up when measured
 from  ground.  Remember that all these things are very personal, there
 is no point in mimicing someone else just because you think that's the 
 way to do it.