1) The tip used varied depending on purpose. I use one of three points as follows:
A) field points at the range or back yard when shooting at stuffed animals because they tear up the targets less,
B) RFA Talons (hunting blunts of choice) for hunting where there is not a high likelihood of loosing arrow because they are the best squirrel head I've found yet,
C) Judo Points for stump shooting (because they are the best for this) or shooting into areas with a high likelihood of the arrow burying under leaves or grass because this point reduces chances of loosing arrows in this situation.
2) The main purpose is to slow the arrow down faster in flight by creating more drag than a typical arrow. This is useful for a variety of reasons including:
A) aerial archery (target practice or shooting birds on the wing) where you don't want to loose an arrow
B) small game hunting when shooting UP into trees (again to reduce length of flight and improve chances of finding arrow
C) stump shooting to reduce wear/tear on shafts and points
D) (secondary benefit) They are also helpful to improve visibility when stumping, small game hunting, practicing aerial shooting, etc due to a larger surface area of fletching. As a result, I'll often grab a flu-flu for shorter shots when stumping or small game hunting where the arrow might be in tall grass, briars, etc when it comes to rest because they are much easier to find.
E) (secondary benefit) They are fun and novel. Often women and children or compound shooters find them unusual due to their appearance and want to try them out. Then, when they shoot them and make the WHOOSH noise, it's fun for the shooter. So, I usually always take them to the range or when introducing a new shooter to traditional archery because they almost always enjoy the novelty of the flu-flu and I love having the improved visibility and shorter flight in case they shoot crazy.
You can alter the braking effect that they have on the arrow by how you build them. Longer and/or taller fletching creates more drag, more fletching creates more drag (3 vs 4 vs 6 fletch), helical is more drag than straight, and spiral is more drag than helical. My favorite is a very tight 6-fletch helical. Out of my 50lb bow they shoot just like my regular arrows out to about 20 yards and almost like my regular arrows out to 30-35 yards depending on the angle of the shot. After that, they slow down QUICK, almost like there is a tiny green army man parachute dragging behind them. Pink is my color of choice due to improved visibility year round:
Hope this helps,
IN QUIVER:
UNDER 6-8" GRASS:
SHOT THAT WOULD HAVE BEEN HARD TO FIND IN THE MUD UNDER THAT BRUSH PILE IN THE BACKGROUND IF I MISSED, BUT I DIDN'T MISS: