I think that the second part of the question:
Also, what are bitwise operators actually used for? I'd appreciate some examples.
Has been only partially addressed. These are my two cents on that matter.
Bitwise operations in programming languages play a fundamental role when dealing with a lot of applications. Almost all low-level computing must be done using this kind of operations.
In all applications that need to send data between two nodes, such as:
In the lower level layer of communication, the data is usually sent in what is called frames. Frames are just strings of bytes that are sent through a physical channel. This frames usually contain the actual data plus some other fields (coded in bytes) that are part of what is called the header. The header usually contains bytes that encode some information related to the status of the communication (e.g, with flags (bits)), frame counters, correction and error detection codes, etc. To get the transmitted data in a frame, and to build the frames to send data, you will need for sure bitwise operations.
In general, when dealing with that kind of applications, an API is available so you don't have to deal with all those details. For example, all modern programming languages provide libraries for socket connections, so you don't actually need to build the TCP/IP communication frames. But think about the good people that programmed those APIs for you, they had to deal with frame construction for sure; using all kinds of bitwise operations to go back and forth from the low-level to the higher-level communication.
As a concrete example, imagine some one gives you a file that contains raw data that was captured directly by telecommunication hardware. In this case, in order to find the frames, you will need to read the raw bytes in the file and try to find some kind of synchronization words, by scanning the data bit by bit. After identifying the synchronization words, you will need to get the actual frames, and SHIFT them if necessary (and that is just the start of the story) to get the actual data that is being transmitted.
Another very different low level family of application is when you need to control hardware using some (kind of ancient) ports, such as parallel and serial ports. This ports are controlled by setting some bytes, and each bit of that bytes has a specific meaning, in terms of instructions, for that port (see for instance http://en.wikipedia.org/wiki/Parallel_port). If you want to build software that does something with that hardware you will need bitwise operations to translate the instructions you want to execute to the bytes that the port understand.
For example, if you have some physical buttons connected to the parallel port to control some other device, this is a line of code that you can find in the soft application:
read = ((read ^ 0x80) >> 4) & 0x0f;
Hope this contributes.