1. Depending on the player, his work ethic might not go down at all. It depends on the player's expectation of playing time, if they're a team player sort of personality and, I'm sure, a measure of blind luck (among other things). But if you have a team filled with upperclass types or multiple players at his listed position with better ratings, the kid may well agree to the RS without penalty. The amount of WE loss (if any) will also vary by player.
2. At D3, you can sign him and he'll show up (at least the first one will...I've heard rumor that if multiple ineligibles are signed in a D3 class that only one shows, but someone else will have to confirm/deny as I've never tried). In D3, ineligibles are able to compete just like any other freshmen would, you'll just probably have to assign a few extra study hall minutes. At D2, you can sign them but there's a chance they won't show and opt to go JUCO instead, leaving you with a walk-on. Also, they'll be forced to sit out their first year and will not improve. You will not be able to redshirt them down the line, but you will have the player for four seasons after the first-year sit-out. D1 works like D2, except there's a minimum GPA the player has to have in order to be eligible to come back for their Sr/5 season. Obviously, if they make the SAT requirement, then you get them from Day 1 and none of it matters (although people sometimes hose themselves in recruiting by promising starts and minutes to ineligibles under the assumption the kid won't get eligible, and then when he pays someone else to pass the SAT for him and gets eligible they find themselves in a rough spot...)