The following article works on the issue of replication chain being broken if a node goes down:

http://www.onlamp.com/pub/a/onlamp/2006/04/20/advanced-mysql-replication.html?page=5

To answer your first question, in this and any of the MySQL master-master tutorials on howtoforge, the first server is the authoritative server. None of the other servers will ever actually be contacted by the application, either to write or read data, unless the primary master goes down. There is little discussion so far on load balancing this configuration.