I waited to see if any of my fellow moderators would have a chance to answer this, but since no one has yet, I might as well!
Actually, Justin pretty much summed up our duties rather accurately!
Like I said the other day on the Lindsey forum, we all consider ourselves Ledgies, just like everyone else... it's just that this particular group of us also act as peacekeepers.
Essentially we read the boards out of fandom... but we also do so with an eye out for any trouble (fights that get out of hand, anything pornographic, etc.).
We don't necessarily read each and every thread or post (though we do our best!)... which is why we ask that if anyone sees something getting out of hand, or that they feel is objectionable, that they report the post/thread to one of us.
We take care of our respective boards, but in the interest of keeping each other abreast of what's going on, we discuss the various situations with each other.
Potential strikes and bans are always discussed as a group, and then voted upon. And trust me, we always take the matter quite seriously... nothing is decided in a flippant way.
Unfortunately there have been a few people who have been banned. Fortunately though it's only been a small handful... and off the top of my head, I can't think of exactly how many.
And no... none of us are paid for this. The costs to run the site (server fees, etc., for both The Penguin, and The Ledge) are paid, extremely generously, out of Marty's pocket... and the moderators do this as a "thank you" to him. (It's certainly not for all the glory and accolades!)
I hope that answers all questions!
Johnny Stew