Only works on SOME airports. Not every airport. And you can still be selected anyways and have to go in with the rest of the riff-raff.
At some airports, correct. At all entry bound Customs, correct.
Being selected, no. You are given a completely separate line to enter and exit from. (At the airports that have this option) At the other airports that do not, you are directed to the Premier (Or First Class, Priority Line, whatever they call it) to get ahead, but still have to go through the usual security routine (taking off shoes, etc..)
Good news is that more airports are adding it all the time.