Beyond being a natural occurance in a race with 200 riders, the Peloton also has a useful purpose. When one or more riders break away from the pack on a "break-away," often tiems they're hope is to finish that day's stage in a significantly shorter time, therefore moving up in the standings. The Peloton allows the majority of the riders to catch those break-away riders most of the time, since a rider in the Peloton uses up to 30% less energy riding in that crowd instead of riding by himself or in a small group.

Therefore, the mas of riders can use their energy more effectivly and typically "reel" the break-away riders back to the Peloton. Of course, some riders can maintain their lead by the end of a stage and do more up in the standings.

As for scoring, it's all pretty simple. The person with the lowest elapsed time wins the race. The person with the lowest elapsed time in the "mountain stages" wins "King of the Mountains" and the rider who wins the most sprints/has the shortest elapsed time during them wins the Sprinting prize. Remember there are mini-sprints a couple times a day in most stages as well as the individual and team time trials.

Why does Lance win (in no particular order)?
He is one of the strongest riders (watch him burn up them mountains better than all but the mountain specialists).
He is one of the fastest riders (typically he's at the top or near the top in time trials and he almost never finishes behind the Peloton).
He is one of the best with strategy and knows his main opponents weaknessses.
He has one of the best teams that work with him.