Contact breaker points are simply a mechanically operated switch.You can see how the little cam opens, and closes the points, right? When the points are closed, they complete a circuit through the windings in the coil. The duration the points are closed is called The "dwell time"(some people say"dwell angle" or "dwell interval"it means the same thing). During this dwell time, the hundreds of windings in the coil are being "saturated" with electricity. As long as the points are closed, this current can go to ground through the points.
When the points open,thats when the fun really begins. The circuit is broken, so all that juice has no where to go. Inside the coil, in the center of the windings, is the "pile" The pile is grounded through the plug wire, and ultimately through the sparkplug. All that swirling eletricity jumps from the windings to the pile all at once, greatly amplifing the current, and ZAP! You get a nice, fat, blue spark at the plugs. This is, by the way, the same way the coil works on your Sportster, and your car, and anything else with an ignition coil. It's just that on those, the circuit is broken by a transistor, instead of a mechanical switch.
There is another little doohickey in this system called the"condenser" or "capacitor". It looks like a little battery with a wire sticking out one end,and in essense,that's what it is . It has the "capacity" to store a small charge of electricity. Its purpose is to bleed off the excess current when the points open,to keep "arcing" to a minimum.
If there is too much arcing at the points, they will weld themselves together, in the same way an "arc" welder works.
Condenser failure is the major cause of point failure.
The next part you may not be familiar with is the "centrifugal advance" All internal combution engines have some mechanism to advance, and retard, the spark timing. In the old days we did it with a little lever on the bars. New engines do it with a computer, and all kinds of sensors(shudder). If you reach in and grab the point cam, you will find you can twist it back and forth.If you take off the point plate you can see how it works. Those little spring loaded bob-weights swing out, due to centrifugal
force,as the rpms increase,causing the point cam to twist, and advance the point at which the points open. Thus advancing the spark timing. All British bikes that I have ever worked on(with points) have the timing set at full advance, 28 to 30 degrees before top dead center. We don't worry about base timing.
It's this little advance unit that causes otherwise reasonable men to abandon our wonderful,reliable, and time proven points,and condenser ignition system in favor of some %#*@&% black box set-up, that surely will leave them pushing. You see, if that advance sticks retarded, the bike will not accelerate, and will overheat, and be generally unrideable. And if it sticks advanced,well all those stories about the kickstarter kicking back, and breaking legs? This is where they came from!
Is it reliable? Yes, but it must be properly maintained. The points themselves give little trouble, other than the rubbing block eventually wearing down. Also inspect the contacts for pitting, or burning. They must be kept free of contamination from water, oil, or other fluids. You can get contact cleaner aerosol, at the auto parts store, for this purpose. The condensers will eventually just quit working, causing the points to burn. Also the little wire likes to break internally, and you don't notice it untill you tug on it. If in doubt, replace. The advance must slide snugly over its shaft, with no wobbling, yet must twist freely, with no binding. also the bobwieght springs break, or lose tension. If in doubt, replace.
Sorry to ramble on so, but you asked for it. Amazing this drink called coffee!