My understanding is that in Peru, and other countries they are eaten, and milked as well.
In this country, they are pretty much strictly a fiber animal.
There are two types, the Suri, which has fiber that looks like dread lock hanging off them,(very cool) and the Huacaya (sp), which is fluffy looking.
As with most fiber animls, the older they get, the coarser the fiber becomes, so young ones are preferred. I suppose you can go ahead and eat the older ones, I'm not sure I want to though...guess if I was hungry enough..
I'd love to get a few of the Suris', but my understanding is that there are not very many of them in this country, and they can be very expensive.
The Huacaya's are much more common, and can be had for a few hundred dollars all day long.
This is of course, for non show animals. The show ones are crazy expensive!
As far a feeding, they do fine on prairie grass, I've been told not to feed alfalfa, but then had someone tell me a small amount in the winter is ok. I'm just going to avoid it when we get ours, to be safe.
Good fencing is required, but any livestock requires good fencing.
Here's a decent article with some good information, sorry it's Wikipedia....
http://en.wikipedia.org/wiki/Alpaca