Shelton,
A quick web search will give you several good papers on the subject, so I am not going to attempt explain the syntax here. In short picture formats are just another way of creating user defined formats, only instead of them being based on mapping indvidual values or ranges of values to a particular value, they instruct SAS on how to display a numeric value with several features that are vary usefull for dates. For non-dates, they are much like numeric to string conversion formats in other languages like C#.
For example when you had the trouble with the 12 character strings, if you had just taken a few of the 9s out of the picture format, it would have returned fewer characters. If you changed those 9s to 0s, you would not see left zero fills.
If you don't have a good grasp on SAS formats, it would be well worth you time to read up on the subject. They are one of the more powerfull features of SAS.
Good Luck!
Curtis