1a - There is no difference to the user from the WP dashboard but if you have subdomains your user can use the subdomain as a CNAME in their DNS.
1b - No differences in cPanel
2 - You can do domain mapping with web server rewrites if you want the site to reside on the original unmapped URL. (ie. you can rewrite the domain to the unmapped URL) The purpose of this plugin has been to allow the site to reside in the mapped domain.
Alternatively, if you wanted to edit the URLs of the sites in Network admin for your users then you do not need this plugin. (answers #3)