1) The view state is a hidden form element submitted each time a page is submitted that contains serialized data about the state of the page. It is analogous to a computer's "RAM", in that it keeps the current operating state of the page.

2) The view state allows a stateful environment. It is how a Visualforce page remembers the values of the elements in its controllers and extensions. Without a view state, developers would be required to store data in the database temporarily or pass form values for all elements in the page, even those that are not currently rendered.

3) It has basically already been outlined, but the view state enables pages to have more than one state, such as the wizard example in (2). It simplifies development by not requiring developers to have to worry about the underlying mechanisms that make Visualforce possible.

4) Anything non-static, non-transient class member will be included in the view state. Save points are always transient, as the database cannot hold the state of the database across transactions (this would cause unnecessary row locks). The view state should be as small as possible to enable fast page loads, but should contain all the necessary data to reconstruct the state without fail. Generally, if a missing value would cause the page to fail to load, it is necessary to be in the view state.