What is the role of kōans in contemporary Buddhism?

I have a copy of *[The Iron Flute](http://www.amazon.com/The-Iron-Flute-100-Koans/dp/080483248X)* that I use to study individual kōans, and read the analysis provided. I feel like this provides me with some good insight, but it also feels... backwards. How are kōans used in modern Buddhism? Are they intended as teaching aids, where the explanation illustrates one or more principals, or are they intended as puzzles that only sufficiently advanced students should be able to figure out? Or can either strategy (or altogether different strategies) be employed to gainful effect?