1) protection has no effect on creating a band - non-targeting. If you grant banding to a white knight he can band w/ a black knight... (never actually seen this, but it'd be allowed).
2) When you block - you block individual creatures, not a band. If any creature in a band is blocked, the entire band is blocked. The attacker gets to assign damage to the blockers as well as damage from blockers among the attacking creatures. Unless the defenders have banding, then the defender can assign damage to the blockers as he sees fit.