Generally they are thrown overhand, but underhand and even sideways throws are also done. Also throwing from seiza, laying down, and while holding a sword are also practiced.

I've never actualy been hit, or hit a person with one, so I don't have personal experience on what damage they can cause. I would speculate it would depend on the location it hit. It would do more damage to the eye than say the thigh muscle. Either way they are considered more of a distraction or nuesance weapon, rather than counting on one to do serious damage or completely disable the opponent. Unlike in the movies, even poisoned ones wouldn't disable the attacker right away. Hit them with the shuriken and then with the sword, or run!