Dowel Pins
#1 Exactly what are Dowel Pins? - Basically, 3 types, or varients (I think),
Type 1 - Joining - More common in wood-working as a simple method of joining two pieces of wood together, similar to 'biscuit joinery', this method of joinery is not so common in 'metal' work.
Type 2 - Locating - The simplest example, big-block V-8 engine, it's kinda important to relocate you heads to your block after a gasket change, the studs still alow the head to 'wiggle-wobble' around, the 'Locating-Dowels' on the block allow a consistent, accurate realignment of the mating parts on a consistent basis. One more example would be locating pins or dowels in a 'Press Die' or Plastic injection mold.
Type 3 - Locking - These are the 'Tapered' variety where you purchase special 'Tapered' drill bits, tapered dowel reamers, and finally, your tapered dowels. (I'm not sure if these are employed as much thses days), but Generally speaking, they serve as either a 'perminent' fixture (ie, you don't plan on EVER taking it apart) or to act as a 'Shear' pin. Example - I've seen a small bench-top-lathe that used a tapered-dowel pin to couple the Lead-screw to the gear train, the theory being, if you have a 'Head Crash' or such, the dowel\shear pins will break first. (As per proper machine design)
#2 How are they used for alignment? - See Type 2 above
#3 How are they mounted? - What are your engineering needs?
They can be press-fit, lock-tighted, epoxied, welded, is it somthing you need to assemble\disassemble a lot? or you only get a one time construct? (Think Space shuttle, Voyager...)
#4 How many do you actually need? - Kinda goes back to #3.
Minimum, (for hobby machining and-you-feel-you-need-it) IMHO, 2, one on opposite corners.
#5 Anything else you can add to make it a good discussion. (Tricks etc.)
I've found 01 Drill Rod (Silver Steel) makes excellent 'Dowel Pins', it usually comes in an 'Anealed' state (soft & workable), then depending on your application, you can leave it 'soft' such as a shear pin, or harden it.
HTH
Cheers,
Chazz