Thank you to jsw for making so many important points. I hope it helps people get a more accurate view of how things work here.
A few other facts may be useful too, and I'll explain more about my role too.
More mod facts
Moderators review each other's work. It's a team effort.
Situations that aren't considered "routine" are discussed by the moderators as a group, to determine whether there is agreement, to ensure consistency, and to avoid overlapping or duplicative moderator actions.
If we can't decide about a moderation action in a borderline case, we don't take action. However, repeated borderline cases add to the severity of the situation.
No moderator is considered junior or senior. All have the same job and are given the same tools. New moderators are also given training, assistance, moderation guidelines, and a wealth of background information.
If a moderator feels a situation is getting personal, we make sure other moderators get involved or handle the situation. It is almost always a case of a member making it personal, not of a moderator making it personal.
The primary purpose of banning isn't punishment or rehabilitation. It's to benefit other members. Our members should not be subjected to posts that detract from their use of the site for its intended purposes, and that's what's most important. However, we don't want to lose a forum member who is interested in the site, so bans are applied only when we feel it is necessary.
People are often curious why somebody was given a time-out or ban. It's natural to be curious, but we do not give out that information. It's between us and the member involved. But 100% of the time it is due to at least one rules violation.
My role
I'm an administrator. Although I can moderate along with the others, there are two differences. One is technical: Some forum and user settings can be made only by administrators, such as giving a user a "Contributor" title. The other is procedural: Administrators review disputes and complaints about moderation, and make the decisions in such cases.
I've personally reviewed the handling of every reported post since I've been a moderator (for 3 years), or handled it myself. I've found very few mistakes. I find that changes to moderator actions are warranted in an insignificant number of cases, way less than 1%. Even if I delegate some of that review now that we have a larger "staff", I think you can count on quality work from our volunteers.
When we do make a mistake, we correct it. Sometimes we catch errors before anybody else notices.
If a complaint is made about a moderator or an action taken by a moderator, I'm the one to contact for the next level of review. (You can contact other administrators instead, but I'm most often the one who is first available.) Complaints can be escalated to arn, and complaints about me should certainly go to arn.
I have also personally reviewed every moderator discussion, and I review every site contact. But no, I don't read every forum post. After all, I need a little time to do Sudokus!
I haven't seen most these "bans" happening but thats because i haven't been around much. I plan to be more active on these boards in the future. 
