I've had both hips worked on for FAI (CAM-type) w/labral tears. It took me over a year to get diagnosed as this was back in 2006/2007, and it wasn't as commonly known at that point.
1. I had my first hip worked on in February 2008 at the age of 28. I was back racing in the Fall of 2008, and ran a 4:17 indoor mile (with 3 or 4 other 4:19/4:20s), 1:09 half-marathon, and a 2:34 (disappointing performance for me) at Boston, all within a couple of months of one another in February-April 2009. (Nick Willis had this surgery as well, and he made a full recovery.)
I had the other hip done in July 2010 (30 years old, going on 31). I was back running 100 miles/week by January 2011. I ran into an ankle issue that required a much more serious surgery and recovery, and I've actually just gotten back into racing again this year. If it hadn't been for the ankle problem, I would have been back racing at the same level as pre-surgery in Winter/Spring 2011.
Return to full recovery (and when) is dependent on the amount of damage the ortho finds in the hip when he/she gets in there.
2. Outpatient procedure, general anesthesia. Both operations lasted about 90 minutes each, but tack on an hour or two before hand for sitting around and prep, and another hour or two after you wake up before you go home. I had arthroscopic surgery both times. If it's a more complex surgery and they have to perform an open surgery, you'd be in the hospital for a few days. Most cases are arthroscopic. As for scarring, I have a few tiny little scars on the side of each hips. Smaller than the size of a dime to start with, now they've faded and are even smaller. The ankle scar - that's a different story!
Pain is not that bad. The worst is the first night/second day, when the heavy drugs have worn off. They'll give you something like percocets to take for a week or so. I only needed them for a few days before transitioning completely to ibuprofen. Listen to the doctor when he tells you to stay ahead of the pain (i.e., start taking the percs BEFORE the stuff they gave you in surgery wears off). It's really not that bad at all.
3. There's no way to rehab FAI without surgery. The longer you wait, the more likely you'll have arthritis in the hip. The hope of FAI correction to delay or hopefully prevent the need for a hip replacement down the line. There's no way around surgery.
If you have any additional questions, feel free to leave an email address in this thread and I'll write you back.
Good luck! Life is so much better once you've recovered from the surgery. I have fully functioning hips for the first time in my life!