I keep seeing the option of putting a Zeiss "lens" on some sights out there and was wondering if anyone has one and what it does. They come in different powers so I assume it magnifies like a rifle scope.

I wouldn't do it for hunting since it's illegal in a lot of states and it causes glare problems if the sun comes in it wrong or the target is shaded. They are great for target shooting though. If you are going to use one for hunting keep the magnification low. I use a 3x for 3D and a 6x for NFAA.

Kodiak has got it right. The lenses are generally used on target sights for magnifying the spots on a 5-spot target, but with 3d being so popular and so many people using "cross-over" bows for both hunting and target they are finding their way onto hunting bows. You can also get a clarifier peep that has a lens in it as well that takes away the distortion of the lens on the sight.

Are they legal for 3D?

Well that depends on what class you want to shoot. IBO you will have to shoot open class.

You can use them in a lot of the ASA classes without shooting against the big boys

I know that Spot-Hogg makes a lens for their sites as well. I have messed around with one a very little bit, and I think I may have gone cross-eyed! They are definitely an aid when target shooting though. The clarifier in the peep makes a world of difference as well. A little too much tech. for me though.

That clarifier in the peep, is that for those of us in the over 40 crowd? If so does it really help? Because my pins are looking a little fuzzy.

The clarifier isn't going to help you with 'fuzzy' pins, glasses are the only thing that will help with that. The clarifier helps clear up lense distortion on the sight end (it gets really pronounced using tiny peeps for target shooting). I find I need one in my spot rig at 6X magnification but not in my 3D rig at 3X.

I believe this to be related.I had a change in prescription for my eye glasses this year,actually right before our archery season began.Because I need glasses for distance I am now challenged by my sight pin being fuzzy(which I really don't like)and my target being clear.I may have to get a longer sight arm,although it is now quite long or find some other compromise so my pin and my target are both equally as clear.
Any suggestions or input is appreciated.

If you have the target in focus but your pin is blurry you may want to try whats called a Verifier........ it will sharpen the pin........ but they come in different powers.... you will have to try them all to find the right Verifier for you eyes...You can find out from Specialty Archery on the Web which bow shops in your area have the Veifier and Clarifier Displays so you can test them out......the wrong powered Verifier will sharpen your pin but blur the target.............Extending the sight bar out may bring your pin in focus but that depends on your vision and everyones differs.... by extending your sight bar out farther away from the bow the pin will appear smaller to you and you will see more percieved movement.... if you would like to have a smaller pin and less percieved movement of the pin you can try to go to a smaller fiberoptic such as a .019 or .010 and leave the sight bar in... it works for some but not all since everyones vision is so different. And remember if you ever change the Scope Lense you may have to use a differnt verifier.
I have personally come to being used to a slightly blurrey pin .... I focus on the target and the spot on it I am aiming at and let the pin fall in place......... my eyes are always focused on the Spot on the Target not the pin since I look at it this way .....I am shooting the Target and not the Pin. If you are focusing on your pin then your target will be blurrey.
I am in the same boat as you since I wear glasses for my waining distance vision and it can be a real battle at times to find the right combination to get the best results for shooting.
I prefer not to hunt with a lense for some of the same reasons others have stated here plus the cost of a Quality lense can be a real deterent to hunting with it.........do I really want to scratch up dragging through the woods a very expensive Quality Lense... and the lower Quality Lenses are really IMO not worth the money they cost... I am your average work for a living person and I dont have money to waste on a scratchedup lense.
Deb