How does the vertical-align property work?

I do not understand when vertical-align will and won't work.

Every time I run into a use case for vertical-align it seems to be a coin toss as to whether it will actually work. I know it has to be applied to inline elements. I have read that I must specify a line-height for elements that do not normally have one. I have read that the height property must have a static (non-auto/non-%) value. I have read that some (modern) browsers do not handle vertical-align correctly if the element they are used on is not naturally an inline element. I am unclear on whether vertical-align should be on the containing element (like text-align) or the element I want vertically aligned.

I've created this jsfiddle to try to work out the problem, but remain confused.

#outer {
  box-sizing: border-box;
  border: red 1px solid;
  height: 200px;
  width: 400px;
  text-align: center;
}

#inner {
  border: blue 1px solid;
  display: inline-block;
  height: 200px;
  vertical-align: middle;
}
    
#header {
  border: green 1px solid;
  display: inline-block;
  line-height: 1em;
  margin: 0;
}

<div id="outer">
  <div id="inner">
    <h1 id="header">
      Some Text
    </h1>
  </div>
</div>

In the jsfiddle above I would expect #header to be centered halfway between the top and bottom of #outer and #inner. Obviously, that's not the case.

Solution

Simply said: vertical-align is only active/valid when the element it is applied to has display: inline-block or ìnline, which for example is useful if you want to align a bunch of images at their top border: You define them as inline-blocks and apply vertical-align: top to them

Here is an example:

.wrapper {
  height: 250px;
  border: 1px solid green;
}

.wrapper>img {
  display: inline-block;
  vertical-align: top;
}

<div class="wrapper">
  <img src="https://placehold.it/120x40">
  <img src="https://placehold.it/70x140">
  <img src="https://placehold.it/80x60">
  <img src="https://placehold.it/60x140">
</div>

In your fiddle, the elements are nested into each other, not next to each other, i.e. they are not siblings - there is only one child element each, so there is no alignment of siblings like in the example above.