How do surge protectors redirect voltage spikes?

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Splatapus
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Questions about how useful surge protectors are.

1) Why is the circuit breaker not effective in acting as surge protection?

2) At home if for example I have my computer connected to surge protector, and surge protector connected to wall outlet. Then there is a sudden voltage spike in the electricity grid. My computer would be protected, but where would the electricity be routed to?
If it goes to the ground pin, then what about the other appliances connected to the wall socket without a surge protector? Wouldn't the surge just be directed into them? (assuming that the initial surge did not go into them somehow)
 

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1. The breaker protects the wiring from a current overload. A normal household breaker usually has two disconnect thresholds. A over-current close to the breaker rating might take several seconds to trip but a very large current like a short circuit will trip almost immediately.
Either way the surge will get past the breaker.

2. Whole house Surge protection and good earth/ground connections at the main panel or utility meter is the best method to protect appliances from electricity grid. For the reasons you talk about plugin protectors by themselves usually provide marginal protection from those events.

http://www.thisoldhouse.com/toh/article/0,,387874,00.html
 
Splatapus said:
Questions about how useful surge protectors are.

1) Why is the circuit breaker not effective in acting as surge protection?

2) At home if for example I have my computer connected to surge protector, and surge protector connected to wall outlet. Then there is a sudden voltage spike in the electricity grid. My computer would be protected, but where would the electricity be routed to?
If it goes to the ground pin, then what about the other appliances connected to the wall socket without a surge protector? Wouldn't the surge just be directed into them? (assuming that the initial surge did not go into them somehow)

To add to nsaspook's great response, look into the timeframes more -- Breaker or Fuse opening time is in the tens of milliseconds at the fastest. Surge currents (from nearby lightning strikes or whatever source) are in the tens of microseconds...