Answer below
1. From your YouTube video, it looks like it stretches the square TV picture onto the monitor. Is this true? It's a pet peave of mine to see $1000's of "high resolution" new tech with better picture quality, blah blah blah and then we are all forced to watch videos and pictures with people's faces stretched giving us the impression that every show is an off-shoot of "The Biggest Loser". Is this how the HDMI out on the Surface shows pics, vids, etc?
It was definitely stretching the images because you could see on the table I had massive borders because of the 1024x768 resolution. However, on the TV which is 1360x768 it was stretching the image to fit (so probably by about 30%). I'm not that knowledgeable with monitors and resolutions to be honest; I've only just got it working for one thing. There probably will be some settings to fix this (maybe use a VGA cable, better TV than mine, quick registry edit hack) but for now I'm just glad I have it working. I will be doing more videos about this in the future when I find out more
2. Does the Surface recognize and work with ad-hoc networks? Specifically for WiFi tethering with a smart phone?
I think so yes. I am going to do a video on this soon
3. Does the Surface's IE notify smartphone networks when tethering to bring up the "You must pay $$$ for HotSpot" window? Or are there other options for browsing the internet with Windows RT?
Don't know to be honest. I would say very unlikely. It will probably treat it like any other wifi network. The key really is to limit the data usage at the source (i.e. the smartphone) so, for android, something like 3gwatchdog will watch how much data you are using.
Also be aware that I'm from the UK where I think data tariffs on phones seem to be difficult. We usually get a data allowance and we can use it however we want, tether or not.