2) The domain name is very abstract, how did this user happen to register it in the month it lapsed? Is there some kind of system out there that notifies people of high-hit domains expiring? (would like to know for future reference!)
Many registrars or other network service providers will allow someone to "back-order" a domain name. This generally entails paying some sort of annual fee for the service. Here is a FAQ on back-ordering:
http://www.namealerts.com/back-order-faq.htm
The way it works is that the service provider checks the availability of a domain at a specified interval (every 12 hours, every 24 hours, etc...) -- the moment it is listed as available, the system will register it to the user who back-ordered it. They can't offer a guarantee, since present domain owners get first shot at renewing the domain. Here's an example:
1. You own the domain "example.com", which I would like to purchase. I set up an account with a service that will allow me to back-order this domain. This includes pre-authorization to register it under my name.
2. The service checks every 12 hours to see if "example.com" is available. If it is unavailable, the service does nothing.
3. Oops, you forgot to renew your contract -- "example.com" now shows up as being available.
4. Sometime within the next 12 hours, the service will do the check and see that "example.com" is now available. (At this point, if you remember and can beat the back-ordering service, you can register for the domain on your own and will get it back.)
5. The service will automatically register the domain under my name, and notify me that I am now the owner.
6. At this point, you no longer have access to anything that depends upon "example.com" (without going through some of the legal hoops as described previously).
The official standards for domain name expiry allow for 2 or 3 grace periods within which the current owner of a domain may renew. However, this may vary from registrar to registrar -- so you may not have that much leeway if your domain does expire. Here is a diagram on this topic:
http://www.hostlead.com/articles/domain-names/back-ordering/domain-name-delete-process.php
If you use Outlook or some other type of calendaring software, you might find it helpful to set up 3-month, 2-month, and 1-month reminders to renew. Note that there is usually no penalty for early renewal -- so even if you renew a month early, you don't overlap your final month.
You may also consider back-ordering your own domain, to guard against slip-ups. Again, there are usually no guarantees (there may be many back-ordering services competing for the domain), but it may give you one final layer of protection.
Good luck with sorting it all out. :cwm11;