I've done a bunch of testing over the last week or so with significant location change monitoring, and I've concluded the following:
1)The quote I posted above is wrong. I've seen significant location change monitoring trigger outside the city.
2)It really depends on how dense cell towers are in a given area. I live in Calgary, and our cell density is less than most places. So I've noticed that this service will trigger in downtown every 500 - 1000 m or so. On the outskirts of the city, its generally once every 10-20 km. In areas of my city that aren't near the core, usually the rate is about 5 - 10 km.
3)The service should restart the app when it has been shut down without user shutting it down. This is supposed to happen when there is a significant location change. However, if the user shuts the phone down, and restarts it, the app will immediately be restarted. I think that the phone clears its list of cell ids, so when it restarts, it automatically believes there has been a large location change.