I think both options are available. Some dumbasses though have had them permanently bonded to their enamel.
My orthodontist has had little gems and “tattoos” for teeth at her office for years. I remember seeing them when I was little, and when I was in 5th grade or so I met a girl who had a little emerald on her canine tooth, and guessed she went to my same dentist, and I was right.
The whole jewel in the teeth thing reminds me of what the monsters in Kate Elliot’s crown of stars series do to their teeth. I don’t think the pictures of these things look very attractive, but it’s no worse than gold capped teeth.
From what I just read in a different article about them (your link isn’t working for me, iluvurmum), they are not good for the teeth (trapped bacteria, etc.) Oh well. Another stupid fad that causes permanent damage.
[hijack]I first began noticing the flashy grills(z) around the time I was noticing the frequency of very small children having fully silver caps.
I talked to my dentist about the silver teeth and he said that once the tooth has decayed beyond repair, that’s the only kind of crown they can use for baby teeth. OMG! I would certainly hope that I’d notice my kid’s front tooth turning brown.
I made a derogatory comment about this to my MIL, and she replied that my BIL had a tooth rot out when he was small. Oops.
But really, how could you NOT notice a very-front tooth decaying? 
[/hijack]
I think of them the same way I think of the incredibly long and ornate fingernails on women.
Both trends have tended to be most popular with a particular social group (ie: rappers, thugs, “ghetto” types).
I view it as on par with the Bonfire of the Vanities, or slashed sleeve clothing of the later renaisance… it’s a conspicuous consumption.
The grillz, like the cars, is a way of saying “Look, I have so much money I can buy incredibly stupid things.” None of them will say that, and in fact many of them probably don’t think of it that way.
The long nails thing (still popular with the older folks) is another example of same… I can get my nails done, and they can be SO LONG… the length, of course, being a way of showing that they don’t do manual work… you try working a cash register with those sorts of nails, and it won’t last long.
This is all my pet theory, of course, and this is the first time I’ve ever aired it in public.
I’m sure I’m going to get flamed for it though… 
Why would you put a crown on a baby tooth? It’s falling out anyway. I cracked a tooth when I was little and they just pulled it out.
As for the fad: Kids do something stupid, Pope is Catholic. Meh. I think Tristan is right about the conspicuous consumption thing. Poor kids buy these to cover up poverty, not just cover it up but make themselves seem rich (this is true for the really poor kids, not the middle-class kids from the suburbs who just copy MTV). Of course, this is paradoxical as the first thing a lot of people think when they see long painted nails or grillz is that the person is poor and trashy.