If so, how do you go about advertising them? Do you give sneak peeks into the book? How do you decide how much to charge when you're just starting, or do you use them mainly as give-away incentives to increase your traffic? Thanks for your time in answering!
You should definitely sell/give away ebooks. You could write a detailed blog post the benefits from your ebook or maybe make a landing page. If it's your first ebook I'd recommend giving it away for free to increase your list of subscribers
You just got to hook them first and if your content is well deserving of a pay, they would definitely pay you the next time. Give out some first, and ask testimonials from them.
The answer to your question really depends on the size of your readership/ email list and your niche. If you are just starting then I'd suggest creating a giveaway book that you can use to grow your email list. Once you've done that and earned the trust of your regular readers you can think about selling premium content. As for pricing; this really depends on your niche and the type of content that you are providing. I'd advise having a look at what other people in your niche are offering and seeing what the price point that they are using is and use that as a guide for coming up with the price for your own product.
Go to amazon and download Reader Magnets by Nick Stephenson. REALLY! It will help so much and it's FREE.
I created a small book and give it away for free on my blog. I am using download monitor ( a WP plugin). You could give away a book in exchange for a mailing list signup using something like Mail Chimp. Also, have you considered putting the book on Amazon and then just adding a sidebar link?