Strange Brake Wear?

[garrett01]

It's been a while since I've looked at my 1981 Free Spirit Pinnacle (27" road bike), but I can recall the last time I rode it I almost had some "close calls" because the brakes were gone.

However, on closer inspection, it looks like (to me) that there is plenty of "padding" on the brake pad. The only issue is there is a groove wore into the pads. None of the brakes stop.

Front brakes

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Rear brakes

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A closer look (rear)...

Link (for in case the image doesn't show)

What could be causing this? I'd like to figure out the culprit before I replace the pads.

Also: is there a special type of brake pads I need to buy? I measured them and they're 1.5". I've never purchased brake pads on my own (always had the LBS do that - before they closed up shop), so I'm not really sure what I need to look for. Is there any special method of replacing brake pads?

[garrett01]

Any ideas as to what is causing the brakes to groove like they are?

1. I bought new brakes for the bike. The brakes I purchased ("Kool Stop Dura 2 Shimano-type Brake Inserts") appear from the image on the website to be much longer than the brakes that are currently on the bike. However, I couldn't find any shorter brake pads. I didn't know if there was a specific type, or if that type of brake pad was "universal."

2. What could be causing the brakes to do this? I've checked and the brakes were center on the rim, as in not rubbing the tire or rubbing the bend of the rim. Also, if the brakes weren't centered - wouldn't it only happen to the pair that wasn't centered and not both the front and rear? (In this case, both brake pairs are worn in the same way, though the rear is much worse.) Is there something I'm missing?

Any help would be greatly appreciated.