Spears were once used by paladins to train skills. However after the Summer Update 2007 they do rather high damage and small stones have taken their place as a training weapon. Paladins with weaker skills still use them for training, though. You need a spear to create an Enchanted Spear. After the Summer Update 2007 spears automatically return to your hand when they haven't broken. This prevents theft. Spears will break about 2,5% of the time. Break % was tested on training dummies so it should be accurate.
After the Christmas 2007 Update, the range of the spear was decreased from 6 down to 3 squares, the same as all "non-magical" spears. There are many creatures with distance attacks, e.g. Minotaur Archers or Bonelords, that will position themselves 4 squares away from you, effectively putting them out of range which forces you to chase them.
Once the paladin meets level requirements, these should be discarded in favor of employing far superior Hunting Spears.