1) I'm pretty sure it's not. It's not going into your skin, really, it's more on top of it, and it's not a dye.
2) It looks very natural.
3) Some varieties are. There aren't that may drugstore brand lip stains, but there are ones from Cover Girl for pretty cheap. Most lip stains I've seen are from more high end companies, and they're more expensive.
4) Well it comes off eventually.
I love lip stain though. I fin glosses to be annoying, and lipsticks and glosses come off too much. Lip stains stay on for a long time, and have a matte look I like. They can look really natural, but can also be dramatic.
I would rather just use lip gloss. I have a whole case of it at home-burts bee's and clinique brands work well for me. I don't like permanent things because trends die out eventually and it's permanent. I have dark lip gloss or light, depending on my outfit and the occassion. I would rather be able to change it when I can. my friend has tattooed eyebrows-it looks so fake. I would think it looks fake with permanent lip colour as well.
It isn't bad for you, you can get some cheap lip stains over here, not sure how much they are in canada. It depends if you want your lips to be that colour all the time or not. I would never use lip stain just because I like my lips looking natural most of the time.