Pacifiers are Artificial Nipples says the Dr. Sears site. His site is one I take with a grain or two of salt, but it is definitely a good second-ranked site for me. First rank are actual medical organizations in the US, UK and UN, as well as actual healthcare research (though of course one must look at the research).
The American Family Physician has a nice article listing various studies (and evaluating the evidence in them. It turns out that pacifiers should be used for different purposes at different times and in different settings.
There are some advantages, and some disadvantages, which is useful to weigh for one's particular circumstance. It turns out that there are no actual advantages for our 3 month old son, and his mother was simply considering a pacifier in order to replace his finger sucking behavior, which can be noisy and a bit obsessive.
However, I consider him to be in the early stage of teething, and so the sucking is a part of that development, and indeed all children (or possibly nearly all) at some point suck their thumbs and/or fingers.
The Mayo Clinic also has a nice article on pacifiers, for good and ill.