You are correct. When setting up replication you have the choice to run them either on a schedule or continuously. Which you chose depends on a number of factors. We always run in continuous mode
because we replicate very large volumes of data and running on a schedule would introduce latency which we don't want. Prior to SQL Server 2005, if an agent failed for some reason, e.g. network loss, that was it. It was stopped. Therefore, I have had to develop a complete monitoring system to look for any failed agents and restart them. SQL Server 2005 retries, though I still need my monitoring code. So, if you can live with a bit of latency the scheduled run option may be a better bet for you.
In continuous mode, prior to SQL Server 2005, the Log Reader Agent scanned the log file every 10 seconds by default. In SQL Server 2005 this has changed to every 5 seconds. You can override this by creating your own profile and changing the value of the PollingInterval parameter. We leave it as it is.
On to your subscriber as read only question. We have a SQL Server login specifically for the replication agents. The login requires public access to master (as of SQL Server 2000) and then we give it db_owner access in the publisher and subscriber databases. Then, as you say, user permissions can be set to ensure read only access.
There's a lot around your last question so it's difficult to give more than a bit of a woolly answer. To ensure the subscriber is up to date you would have to stop writing at the publisher and make sure all transactions have replicated. The Replication Monitor (SQL Server 2005) or Enterprise Manager can be used to determine this. Slight gripe now. SQL Server 2005 Replication Monitor is a major step backwards. It's awful, though I seem to be alone in this judgement from articles I've read. Anyway,
once all the transactions have replicated just drop the subscription(s).
Presumably, whatever was updating the publisher will now be writing to the new active database to keep it up to date.
I waffled on a bit but I hope all that helps.