Hi TimK,Welcome to the forum and congrats on completion of your ebook.
Your inquiry covers several topics, so let me break them down by first addressing passwords.
If you select to use the thousand passwords any two users sharing the same password is a 0.01% probability. The ebook has two basic modes of operation locked and unlocked. Most often the unlock mode is referred to as 'registered' or 'purchased' ebook.
In the lock mode you can choose which pages the user will see. The advantage is that you can present the prospective customer with a sample of your ebook--say the first two chapters for example. After they have purchased the ebook and entered the registration code (think password) the remaining chapters of the book can now be viewed.
When someone purchases your ebook and then gives a copy to a friend (often referred to as file sharing) when the friend opens the ebook on his computer he will see just the preview version. Cool uh.
Now the question of how they purchase your ebook and how do they get the registeration code. If you use Activ alone the user will see a number from one to a thousand. That number corresponds to an unique registration number, which you'll need to email back to the buyer.
If you purchase HYPrLock v3 in addition to Activ the buyer will automatically be given the registration number after they purchase the ebook. Another nice feature of HYPrLock is that the customer can click on a 'Buy It' button and be taken immediately to PayPal (or ClickBank if your prefer) to purchase the ebook. It's after the purchase they are given the required registration number to unlock the ebook.
Hope this clarifies matters for you.