An altar can be seen in the uber mob ad, the yellow skull orb in the center.(picture below)
1.Altars emit light, about the same as a portal.
2. Pretty rare. I suggest making a small world to find them a little more quicker.
3. They' re random but I say mid way in a small world is a good place to start.
Also make sure your prepared to fight. The world picture on the very bottom is a small portion of the after math of the Terra uber mob. They destroy blocks. So carry some blocks with you and life providing potions or foods. Maybe some defense potions.