The old domain (saveyourself.ca) mentioned in the article does do this.

That was the whole point of the article ;) how that didn't work and how it fucked his site.

That's probably what he did - it's the best practise, I believe.

I think they do. If you setup 301 wildcard redirects, google should replace the old site's urls with the new one in their index over time, after they've been crawled. (at least from what I remember when I was digging into it myself)