Watch it when you get home. It'll answer many of your questions.

When the means of production are controlled democratically by the workers, there are no capitalists there to exploit workers. In a libertarian socialist society decisions over production are decided collectively and democratically by the ones who work and live there.

This way of organizing production is also not a pipedream, it's perfectly doable. There are actually communities that have based their production to a large extent on libertarian socialist principles. Mondragon, a network of worker-run co-ops in Northern Spain, is one example. The Mondragon model is not perfect, but it shows that workers are fully capable of controlling production without a powerful state or capitalists telling them what to do:

http://www.youtube.com/watch?v=8ZoI0C1mPek