A lot of your questions were addressed in the GoogleIO video. You can cancel at any time, not sure how they handle returning the hardware. If it breaks or needs updating, that is covered.
"Google says there’s a three year subscription required. Hardware will be upgraded at the end of the three years, if people want to continue on the plans.
If hardware breaks, it’ll get replaced under warranty. But if you decide you want a shiny new Chromebook with perhaps better screens, trackpads or whatever midway through the program, there seems to be no provision for that."
Source: http://searchengineland.com/google-chromebooks-out-june-15-3...
So if you intend to do anything other than checking your e-mail over that connection then you'd better factor in the cost for a real data plan.