Napa's Del Dotto winery
A friend of mine recently returned from a trip to Napa Valley to do some wine tasting. He said his favorite wine tour was at Del Dotto Vineyards. There, he and his group got to do barrel tastings of their wines, including tasting the same wines fermented and aged in both French and American barrels. He said it was amazing to see the difference in the side by side comparision with the different kinds of oak.
French barrels cost more than American barrels (roughly $800 per barrel, compared to $500.) Much of the reason for this is due to the way the grain runs in French oak--coupers can get less barrels out of the same amount of French oak than they can with American oak, so they need to make up the cost somewhere.
So what are the flavor differences between French and American oak? French oak imparts a more subtle, savory flavors due to the tight grain of the wood. American oak, on the other hand, has stronger, sweeter flavors of vanilla, coconut and spice--the wood grain is wider and looser, so it tends to impart more flavor.
Of course, the cheaper way to add oak flavor to wine is to dump oak chips into the barrel, or use an oak stave (think giant tea diffuser filled with oak chips...).
However winemakers choose to oak their wines, oak adds tannin, structure, and often the ability for the wine to age. And over time, the tannins from the oak treatment, as well as from the wine skins, will drop out of the wine as sediment, leaving a smooth, silky, complex wine.