Text Widgets and Automatically add paragraphs??

Hi, say, I am adding a few text widgets to my sidebar, I need a little help understanding the full function of the text widget.

I am adding banners using the text widget, is this the best widget to use for this purpose?

What does the Automatically add paragraphs function do?

And last, how can I get more space between each text widget on my sidebar? When I refresh my page, they are very close together and I am looking for a bit more space between each one.

Any help on this subject would be appreciated.

Thanks, Dave