Handfasting isn't always used
as a
marriage ceremony, although it can be. In many contexts it is used as something more like an
engagement, but deeper, there actually is a
ceremony and a spoken
pledging of promise, in front of friends and/or family, and it is led by a pagan
priest or
priestess.
Most of the couples i know who have been handfasted have since then either gotten married "legally" or have wedding plans in the works. But in most cases it is interim either way, a period before a marriage, "legal" or not, there are wiccan/pagan wedding ceremonies that dont hold up in courts of law. Sometimes it is done because outside reasons leave marriage an unviable option at the time, some people just want some bond deeper than an engagement in the period before the marriage.
however, handfastings, or more often their renewal a year and a day later do have one option of being "legal"--most pagan clergy also become ordained in the unitarian church, who is more than happy to comply. Having done this, they have the same athourity to sign the papers as does a justice of the peace or any other minister. So the ceremony will be performed in proper tradition, and the papers signed in a way it complies with the state.
see http://www.thetask.com/thresholds/handfastings/ for *much* additional information on pagan/wiccan handfastings and weddings.