Thanks for the responses. I secured my first alliance with the Jessuins after the Andians were gobbled up and the Altarians declared war on the Jessuins, who asked me as their main trading partner for help. I bribed the Altarians to make peace and build up the Jessuins (more pop, more trade) and took the alliance option when available. The Altarians have not declared war on them again.
The second alliance was the result of using the Drengins to fight a proxy war against the second great power, the Torians. I didn't want anyone else to get the Drengin territories and the Torians, Iconians and Altarians piled on them. I fed them modern ships and technology and cash and although their military strength was rated small it was all good combat ships so they bloodied the attackers. Iconia made peace with them. Since I was on friendly terms with the Altarians and I didn't know what allying would do, I bribed them to make peace (cheap actually, and they had lost several fleets) before allying. This left the tiny Drengin Empire at war with the large Torian Empire, and I allied with them but nothing popped up asking me to go to war - therefore I asked the question above as to whether Alliance does anything.
My hope is that the Alliance will deter anyone else from attacking the Drengin while the Torians will keep fighting and taking substantial losses based on Toria being the number 1 military power and the Drengin being the 8th (it must measure tonnage or something like that, not fighting power, since the donated cruisers keep beating the Torian fleets that flow towards them). When more Torians show up, I donate more ships, and unless the Alliance relationship indirectly affects relations I'm still neutral with the Torians.
Maybe I'll try an alliance victory, or just use the Drengin as attrition against the Torians while I pursue Tech victory or influence victory -- something different from just killing everything.
BTW this is on "tough" with randomized opponents and the only other war was one between the Arcaens and the Yor - I saw the Yor were doomed and jumped in and grabbed most of the Yor planets, the Arcaen conquests then fell to influence.