When you start Civil 3D 2007, you can either log in automatically or manually login to the Vault Via the Master view in the Prospector tab.
In this way, Civil 3D acts as a client to the server installed either locally on your own machine, or on another computer connected over the network.
So, if you choose not to login to the vault, either on startup or manually, you can still draw without being logged into a vault. But, if you want to access Drawings that are part of the vault, then yes, you will need to login and check them out, or obtain a (Read Only) version depending on your user privileges or situational preference. I hope this is not getting to complicated.
I believe a user can access as many Drawings as she/he wants, but I may be wrong in this. In my experience of using this new project setup, I have been able to open and work in all the .DWGs in my vault at one time (about 4-5 drawings). This environment can be tricky cause in order for the changes to update you have to save the drawing, and then check the drawing back in. When using references, you then have to sync the child .dwg to the project, where the changes in the parent .dwg will carry over to the child. Kind of complicating, but a very nice feature.
Remember, that when you check out a .dwg, no one else can open that .dwg from the vault. So, it may be wise to only check out the .DWGs that you need to be working in.
As far as a time limit, I do not think that there is a cut off point. Someone else might be able to answer this one.
I hope this helps you.
Best,
Shark