Judging by what happened the one time I built them, they provide a one time boost of diplomatic capital upon creation. As far as I can tell, they don't generate any beyond that initial amount.
I guess the best use for them is if you're feeling cheap, you can build one or two and use their diplomatic capital instead of gold for your next deal. Then, once the deal goes through, disband them or use them as bandit fodder. Although they cost gold and people to recruit in the first place, so whether the payoff is worth it is debatable... 
No idea if they can be sent into another faction's territory. I may try that next time.
