Vander,
Good questions. Here is a post from Randy Watters in another thread discussing hell. He's done a detailed study of the history of the teaching which is available through the link below.
From Randy
The concept of a burning hell predated the church by ages, and was developed somewhat in the Talmud. Mainstream orthodox Judaism did use it as fear of punishment, but as Jews can be in religious discussion, the rabbis had many stories woven around it, some of which were contradictory, but all pointed to clear physical punishment. Most all the cultures had similar punishments awaiting the damned.
While the OT Sheol was definitely a place for the bodiless soul, which "lived" on after death, awaiting the resurrection (recombination of soul and body in Jerusalem on the Mount of Olives), the intertestamental period between the last of the prophets and Jesus borrowed all kinds of previously unknown concepts, such as Tartarus, the Lake of Fire, Gehenna, and God watching the torment of those who reject Christ from the AGES TO THE AGES (aionios ton aionios) as well as the abstract mathemetical concept of infinity; something foreign to the Jewish mind. Jehovah got meaner between the old and new testaments!
Jesus, in his parable of the Rich Man and Lazarus and other warnings to the Pharisees, simply expounded the same tradition of the Pharisees; unlike the Sadducees who did not believe much in the supernatural. Jesus used the same illustration types we find in the Talmud of hell; in fact he makes it somewhat worse on occasion.
This is what is so damning to the Watchtower - to reject hell they reject a prime teaching of Jesus. He didn't use a story of something disgusting to himself to warn people that they would meet the same fate - how stupid are the JWs with this.
Compare views on hell HERE http://www.freeminds.org/doctrine/bible/hell-traditionalist-vs.-conditionalist-views.html