#1
I've been wanting to get one for a while now, I don't know much about it except for that it smoothes out the notes and makes the guitar sound like a violin or something of that nature, and from watching video of Amsterdam by Coldplay from their Live 2003 DVD, looks like it works great and creates some amazing sounds. I heard they were really expensive so should I get one and if so where should I go for a cheap price?

http://youtube.com/watch?v=iQTqyTQFd-s
Heres the video of Amsterdam by Coldplay, and its at the 4 min mark when Jon Buckland uses the E Bow, watch it and btw its a really good song.
#2
an ebow costs 80 bucks.. which is compareable to that of a mid range effects pedal. And you can make a LOT of cool sounds with one.
Gear:

American Strat
Epiphone Valve JR head - Volume Mod'ed
Custom 1x12 with Private Jack speaker
Boss BF-3 Flanger
Boss DS-2 Distortion
Boss MT-2 MetalZone
Ebow

Gretsch Acoustic