I have not had any experience using the GPS routinely, but I can answer your other questions:

They key expires and you can no longer use the routing features of the software. You can, however, still see where you are, and search for POI, but it will not do turn by turn directions unless you pay. The maps are stored on the internal memory, and you do not need wifi/cell to download them.

The map application that comes with it (wayfinder) is the only full navigation solution that does not require an active internet connection to rout you. Maemo-mapper is free, but you either have to download the maps and routing information ahead of time, or have an active connection (especially if you plan to deviate from the path)

I hope that helps