1. No
2. You will continue on the same tarriff unless you let them know a month before that you wish to switch, effectively starting a new contract.
Orange are bastards. Their guide to which phones you can have for free only applies to "new" customers.
My Girlfriend paid £25 per month before renewal this year (was in April i think) so she looked at phones that were free on tarriffs that cost either £25 or more.
When ordering they told her she couldn't have the phone for free because she hadn't earned ehough "points" during the contract term. Her options were to either have a shite phone or cancel the contract and get a new one. The got a new contract. It's a pain in the back side if you had a particularly generous offer before that is no longer available.
I believ the points you earn depend on how much extra you spend on your bill each month.