Your question about inbreeding - if it is common and if it is a good idea is an excellent one. Yes, it is common. Is it a good idea? That's more controversial.
In breeding increases the likelihood that a given animal will receive the same gene from both parents, resulting in it's being homozygous for that trait. This can be either good or bad, depending on the specific trait you are looking at. If the trait is a positive one - say having the hair color you want, it is a good thing. If you breed two individuals that are homozygous for the same trait, 100% of their offspring will also have that trait. If that trait is dominant, 100% of the offspring will have that trait, even if only one of the parents is homozygous for th trait.
But what if the trait is not positve? What if the gene is for hemophilia, or to pick a negative trait specific to Dexter Cattle, the gene for achondroplasia? In this case, inbreeding would increasing the likelihood of having a negative characteristic.
The amount of inbreeding can be calculated by analysing the pedigree of an animal. The more generations you have recorded, the more accurate the calculation. You can do it by hand, but the easiest way is to use a program to do it. One good program is Pedigree Viewer, by Brian Kinghorn. Best of all it's free! Here's his website if you're interested:
http://www-personal.une.edu.au/~bkinghor/
There are several sites where you can learn more about inbreeding / linebreeding etc. Here are a couple to get you started:
http://members.tripod.com/~Marge_S_2...inbreeding.htm
http://www.genecarrhorseranch.com/line_breeding.php
Bottom line, Inbreeding can be a powerful tool used to strengthen or improve a line and make it breed true. Unfortunately, I don't think this is very often the result. I think the most common reason for inbreeding is probably ignorance. Most people aren't trying to do something harmful, in fact most people are probably trying to do something good. But breeding is a science that does take some time an effort to really understand. A lot of people dont take the time to do that.
The best advice I can give you is to read, read, read and read some more. If at all possible, find an experienced breeder and have them mentor you and to learn and know your breed.
Best advice I can think of