I think this might
answer your first question.
The second question might be because the buttons are faded or enabled depending on if you are in WYSIWYG mode or standard mode.
You can check the settings in admin > settings > options > message posting interface options and enable WYSIWYG.
Mind you, I might still be wrong on the second question.
--------------- Added 21st March 2014 at 13:58, 21st March 2014 ---------------
I forgot to answer your second question on how useful this is.
When you try to copy pasta something like microsoft office word, the browser will prevent you from pasting that into your reply box. That is what the two buttons is for.
You just click that, in this case the right button and paste the copied ms office word into the box and vBulletin will try to get it in. It can take a while for the board to complete the paste in.