As for learning http://www.funnestra.org/ubuntu/intrepid/ is one of the best Ubuntu sites. There are other distributions and other sites but this is a nice all in one location. Of course, if your PC is down, kind of hard to read and get yourself up to speed. However, if you want to, there are sites on the internet where you can order the installation CDs/DVDs if you do not want to make one yourself.
As to your question about the Linux install, Yes, it would wipe out Windows and completely replace the operating system. Ubuntu, like all major OS and distributions does have a update function. However, unlike windows, it does not run automatically unless you take the extra steps to set that up. Default install comes with the ability to update but does NOT turn it on. The other think to take not of is that most distribution trees (Ubuntu is a distribution, so is Slackware, Fedora, etc - all Linux) are basically an assembly of Linux programs “packaged” together so that they run well. It is in the distribution's own best interest to test a change BEFORE they put it out their for their consumers. Competition is a good thing. Because of someone gets unhappy with distribution X ... they can switch to distribution Y fairly easily.
Also, if you were not happy with the Linux install, you could return the laptop to Windows but it would require a fresh install of windows once again wiping out the hard drive.
If you have other questions I can help you through the process. It can sound intimidating but really, it's not that bad.
Ever try Linux Mint. For a newbie there’s a lot less mucking around with codecs, flash etc. The current release is based on Hardy.