The following is an excerpt from page 115 of the Warhammer Chronicles 2004 release with an expanded explanation regarding Monster & Handlers.
There have been several questions regarding how the rules for mixed units of monsters and handlers work (Dark Elf War Hydras, for example) so here are some clarifications:
These units do not count as skirmishers, though the models are not ranked up.
When determining what the unit can charge, or for the purposes of flank/rear charges by enemy units, use 90° arcs centred on the monster itself.
When the unit is in close combat, it forms up following the rules for skirmishers - ie, those in range get into base-to-base contact, those out of range form up behind.
The models in the unit move at their own Movement value as long as they remain within 1" of each other.
Also note that any character allowed to join the unit counts as riding' the monster for the purposes of any special rules they may have. For example, if a Dark Elf Beastmaster joins a War Hydra unit, then it does get to ignore Monster Reaction tests if all the 'crew' are wiped out.