#1 A dyno measures rear wheel horsepower and torque. The person running the dyno will pull your bike onto the dyno, strap the front end of the bike down and the rear wheel will be set on a roller so it can spin with slight resistance. Usually, they will do three passes, ultimately to find peak horsepower they will redline sixth gear.
To answer #2 a little better, a power commander lets you adjust your fuel ratio in relation to rpm's to get the smoothest power band possible out of your bike. All bikes have flat spots and peaks in the power curve, a properly mapped power commander will smooth out these flat spots and peaks, not necessarily giving you more power overall, but more usable power.
#3 The maps change the fuel ratio at different rpm's and are available on
www.dynojet.com you need different maps for different exhaust or air filter setup. To get the most out of your power commander you should have a performance or race shop dyno your bike and make a custom map for the power commander. The maps you can download are generic maps for the most part, no bike runs the same due to altitude, humidity, temperature....etc. If you have this done you will get the most usable power, however, it comes with a price and it's usually around $300 depending on how much time your bike is on the dyno.