Well the full answer to your first question is here: http://www.atnf.csiro.au/~rgooch/linux/docs/devfs.html
But I guess that just raises the question of what was in /dev before devfs came along and that is answered here:
But to answer your second question simply type 'mount' and look if there is a line saying:
none on /dev type devfs (rw)
or similar - if so you are using devfs.