I used to have about a 100 machines with 4 gang BCD thumbwheel switches. I haven't seen them in over 8 years, and I don't miss them.
How did they work? Quite Well, suprisingly.
All new machine upgrades were getting Maple Displays with a touch pad for setting parameters.
Don't think I would go back to thumbwheels.
So, as an answer to the student question, they work quite well, until you decide they are probably impractical in modern equipment and get a decent (but probably very pricy) interface.
By the time you buy an extra 16 inputs, design, progam, wire, and test, it is cheaper to spend a couple hundred $$$ for a low end interface/display.
Sad thing is, what few plc books I've seen on inter-library load, at Borders, and at Barnes and Noble, (even with recent copyright dates) are all outdated and still tout bcd thumbwheels.
Oh well.....casey