Do database views affect query performance?

I have always considered Views to be like a read-only Stored Procedures. You give the database as much information as you can in advance so it can pre-compile as best it can.

You can index views as well allowing you access to an optimised view of the data you are after for the type of query you are running.

Although a certain query running inside a view and the same query running outside of the view should perform equivalently, things get much more complicated quickly when you need to join two views together. You can easily end up bringing tables that you don't need into the query, or bringing tables in redundantly. The database's optimizer may have more trouble creating a good query execution plan. So while views can be very good in terms of allowing more fine grained security and the like, they are not necessarily good for modularity.

It depends on the RDBMS, but usually there isn't optimization going on, and it's just a convenient way to simplify queries. Some database systems use "materialized views" however, which do use a caching mechanism.