Hi Rebekah.
1. Your customers can choose to pay for one or both. Listings that are featured on the home page are not featured on a category page. And vice-verso. If you sell a lot of featured listings, they will paginate and be listed before any non-featured listings, just like how featured posts would on most regular WordPress themes.
Currently, there are no limits on how many listings may be featured. There are, however, some major improvements to the featured listings logic in the works for Vantage 1.1
2. Currently, automated recurring billing is not built in. Here's how it works: When a listing is nearing expiry, the customer gets emails reminding them that their listing is about to expire, and then another reminding them to re-list once it actually expires. So, for now, your customers will need to log in and click the "re-list" button every once in a while. The Dev Team has discussed automated recurring billing, but that is not something that is currently in the works.
Please let me know if you have any additional questions.