Yo, Irk. Stereo recording is a process where 2, or occasionally more than 2, mics are used in such a way that when panned partially or completely left and right to 2 speaker arrays, attempt to model or replicate the audio information that comes to the two ears of a person present at the actual performance. In order to do this, the 2 mics must pick up slightly different information, just as the 2 ears of the listener do.
There are a bunch of ways to do this. The X-Y technique, often called coincedent stereo mic'ing, you mentioned. Other popular versions include spaced stereo mic'ing, ORTF, mid-side (M-S), binaural, and the Jecklin disc. There are a number of other systems which while not strictly stereo, can sound very good, such as a Decca tree. Do a search on each of those systems and you'll find lots of stuff. Here's a really useful link for you-
http://www.dpamicrophones.com/
Check the section on stereo techniques.
And as to your first question. Yeah, you can use 2 SM57's as a stereo pair, but they are not very well suited for it. They lack reach, and aren't particularly sensitive. Can you use a pickup truck for a Grand Prix racer? Sure, but don't be surprised if you don't get past the qualifying round.-Richie