I have heard a lot about error handling and exceptions. Do we really need them. If we can check check errors with custom functions, do we really need error handling & exceptions.

Are they really very useful?

Well, for one thing - you don't have to write custom functions cause you have the error handling and exceptions.

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I am unsure about you question, I think we do need error handling, I think its important to be able to process any errors the script may produce in a controlled way instead of just farting out the fatal error to people, opening up a whole new pandoras box of problems including and not limited too: security problems and making your site look unprofessional.
Making your script fail gracefully very important, in my opinion.

Sorry if i have misunderstood.

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mysql> SELECT * FROM `users` WHERE `users`.`clue` > 0;
Empty set (0.00 sec)

I'm also not sure exactly what is being asked here. Checking errors with custom functions is error handling! As for error handling and exception handling, they're both important and it's all too easy to (wrongly) either only handle 'errors' (by routing exceptions through error handlers) or 'exceptions' (by routing errors through exception handlers).