My favorite quote regarding simulations comes from Dr. George Rose, professor at the Johns Hopkins School of Medicine:
Running simulations is very much like masturbation. Do it often enough, and it starts to feel better than the real thing.
The advantages and disadvantages of computer simulations are somewhat obvious. On the plus side, simulations are cheap (generally - supercomputer time can be expensive) and just cost computer time. Simulations can be used to model population dynamics without going out in the field and counting populations of animals. Simulations can estimate which drugs will be good candidates for interactions with a certain protein, thereby narrowing the number of chemicals to synthesize in drug trials. For the researcher, simulations allow total control over every parameter in the system. In molecular dynamics, one can separate the energy from hydrogen bonds, from electrostatics, etc., something which is nearly impossible in experimental setups.

The down side is, as the aforementioned quote warns, that simulations only model what they are told to model, not necessarily reality. The simulation may even work in special cases, but changing any of the parameters might cause it to behave unpredictably. The cornerstone of good simulation science is constant communication with experimentalists. A healthy respect for the limitations of the simulation, and efforts to verify simulated models with real data, strengthen both the validy of the simulation, and the understanding of the experimental results.