Hi there. I'm not an Adventure Pilot employee, just a user, but I think I can answer your questions:
1) Your flight plan becomes "active" as soon as you leave the flight planning screen and return to the moving map.
2) The iFly guesses at your location in the flight plan, using some combination of how close you are to the waypoints and what direction you're flying. Unlike panel-mounted GPS's like the Garmin 430, you can't select a leg and say, "Activate". You *can* select a point and choose "Fly direct to" to quickly get a magenta line from where you are to where you want to go. (I don't ever use this option, so I'm not sure if that replaces your current flight plan; you could test this by using the iFly's simulation mode.)
3) Again, unlike the 430, the iFly will not "round the corners" and give you instructions to lead-in to the turn. (Though if you ask for this feature, Walter may add it to the wish list for a future software version!)
Hope that helps.