For instance, will I be able to create an application that allows users to create and modify existing types at runtime? Will I be able to persist instances of those types in SQL without having to worry about the user who adds 100,000 records and expects a (really) fast query on them?
Think SharePoint Content Types... but on steroids. Oslo steroids - Possible or not?
That would be awesome!
In the demos, they create the new extent, and then a (updatable) view with the old name.
But I haven't heard about a feature that would automatically merge existing data into the new structure, though. For now, they suggest using SQL Server Integration Services for that part - but then it's a DB-Admin task.
Regarding performance, after MSchema is compiled to SQL statements, it's all plain SQL Server performance.