It definitely has a timeout. If you don’t play for a week or two you have to go online to renew the token. I thought it would eventually time out even if you keep playing, but I could be wrong.
Nope, it isn’t. Circumventing a copy protection device is illegal, period, even if you are doing so to make fair use of your legally owned software. That’s why things like deCSS for decrypting DVDs aren’t widely distributed by linux distros that have a presence in the US; because it’s illegal to distribute a copy protection defeating device.