Kara, in answer to your questions, here are my thoughts:

1. It can do (and has done in my case, albeit occasionally). For pubs who have open mike nights and who also put on regular gigs, it can be a good way for the landlord (or organiser) to see what you're like before booking you. It is, of course, also a good way to meet other musicians, which can lead to performers forming bands and, consequently, getting gigs.

2. The number of people who go only to listen is variable and, in my experience, not usually that large. Many are there for their five minutes of fame!

3.Depends. I'd like to think that any paid gig would be of a reasonable standard. At open mikes you have to take the rough with the smooth. Having said that, I've seen many people perform at open mikes who are of a really high standard, and they often attract gigging musicians anyway.

4.Possibly, but most of the places that I know of tend to have open mikes during the week and paid gigs at the weekend, so they compliment each other rather than compete. Open mikes may be a good way of filling a pub during the week when perhaps many punters wouldn't make the effort to go and see a band.

5. I can't say for certain, having only relatively recently returned to Britain, but my impression is that they are fairly new, certainly in terms of how widespread they are. This may be related to the hard times that pubs have been going through and the need for landlords to be more inventive in getting punters into the pubs in order to stay afloat.