Understanding SQL Server LOCKS on SELECT queries

A SELECT in SQL Server will place a shared lock on a table row - and a second SELECT would also require a shared lock, and those are compatible with one another.

So no - one SELECT cannot block another SELECT.

What the WITH (NOLOCK) query hint is used for is to be able to read data that's in the process of being inserted (by another connection) and that hasn't been committed yet.

Without that query hint, a SELECT might be blocked reading a table by an ongoing INSERT (or UPDATE) statement that places an exclusive lock on rows (or possibly a whole table), until that operation's transaction has been committed (or rolled back).

Problem of the WITH (NOLOCK) hint is: you might be reading data rows that aren't going to be inserted at all, in the end (if the INSERT transaction is rolled back) - so your e.g. report might show data that's never really been committed to the database.

There's another query hint that might be useful - WITH (READPAST). This instructs the SELECT command to just skip any rows that it attempts to read and that are locked exclusively. The SELECT will not block, and it will not read any "dirty" un-committed data - but it might skip some rows, e.g. not show all your rows in the table.

On performance you keep focusing on select.
Shared does not block reads.
Shared lock blocks update.
If you have hundreds of shared locks it is going to take an update a while to get an exclusive lock as it must wait for shared locks to clear.

By default a select (read) takes a shared lock.
Shared (S) locks allow concurrent transactions to read (SELECT) a resource.
A shared lock as no effect on other selects (1 or a 1000).

The difference is how the nolock versus shared lock effects update or insert operation.

No other transactions can modify the data while shared (S) locks exist on the resource.

A shared lock blocks an update!
But nolock does not block an update.

This can have huge impacts on performance of updates. It also impact inserts.

Dirty read (nolock) just sounds dirty. You are never going to get partial data. If an update is changing John to Sally you are never going to get Jolly.

I use shared locks a lot for concurrency. Data is stale as soon as it is read. A read of John that changes to Sally the next millisecond is stale data. A read of Sally that gets rolled back John the next millisecond is stale data. That is on the millisecond level. I have a dataloader that take 20 hours to run if users are taking shared locks and 4 hours to run is users are taking no lock. Shared locks in this case cause data to be 16 hours stale.

Don't use nolocks wrong. But they do have a place. If you are going to cut a check when a byte is set to 1 and then set it to 2 when the check is cut - not a time for a nolock.