1. Correct. Holding a pointer to the method will need to increase the reference count of the object to guarantee the object is alive when the method is actually called.
2. Yes, the delegate will hold a pointer to both the object and the method.
3. That is the dilemma. For now I will not bother with weak references, so a delegate will initially hold a hard reference to the object. The garbage collector is already capable of resolving circular references that may arise, so this shouldn't be a major problem.
The difficulty with weak references is more a design issue than the actual implementation. The weak references must be generic so the script compiler can build the code for them, but they must also not add a performance penalty where they are not used. I'm toying with several different ideas for this, but so far I'm not ready to start implementing weak references in AngelScript.
