In Denmark. The percentage of people here wearing helmets seems to be dropping again after having been on the rise for the past few years (based on my anecdotal evidence of biking around copenhagen), but it's still relatively rare. I know at least 3 people who had simple accidents while not wearing helmets and while they did not die they suffered severe concussions that take years to fully recover from (if ever). One guy was unable to work for close to a year, and still 3 years later suffer frequent intense headaches. You don't have to die in an accident in order for it to be something you really should try to avoid.
Yes, I think that is one of their main purposes. It basically takes the impact energy and distributes it over a larger area and over longer time, reducing the risk of permanent brain damage. This website has some charts of a lab experiment showing the difference in the energy spike felt by the brain. http://www.bhsi.org/general.htm
I fell onto my bike helmet, on pavement, splitting it in half. I can tell you from personal experience that helmets definitely protect against concussion.
