I use a few supplemements, but specifically protein powder wise, I use optimum nuttitions Gold Standard Whey and when cutting cals, caesin. I find they are low carb, high protein, quality ingredients, with low sugar and a great taste. I use them more when i dont have a chance to eat (like in between classes/jobs) or in the mornings before classes, because it makes me sick if i eat any solid foods before cardio (just me, ymmv).
As far as building muscle, you need to be in a calorie surplus to build muscle. Your body needs extra fuel to actually build so if you are not eating slightly above maintence calores, then you are not building muscle. So please do not think that adding in protein or protein powders alone will build muscle.
Also know that there is no real NEED for protein powders, if you are eating a diet rich in protein all ready and are getting enough protein there, then there is no reason to purchase supplements. I know all the marketing says you should, but really its only a convienence issue.
I also dont really think its a recovery booster per se, Having the correct calories and correct macro levels as well as adequate sleep/rest and a properly set up training program will be the best thing for recovery. I mean, you dont eat 8 ozs of chicken or beef for recovery, so a protein supplement isnt going to do much recovery wise except help you hit your cals and macros better.
For taking them, i mix them in about 6oz of water, whey is taken as needed and caesin is taken when dieting down at bedtime (slow digesting, keeps you fuller longer, no need to wake up hungry). Again, this isnt an everyday thing as i prefer to get my protein from actual foods, shakes should only be a supplement and not the basis of a diet.
Benefits, are ease of use, and easier to fit foods into my diet plan. Other than that, there is no real special "magic" about protein.