Fusion Tables will be much easier to work with as it's basically
automatic. The tradeoff is you get much less (no) control over the
rendering.
1. gheat renders 256x256 tiles for your map. Whether or not it will be
able to scale for you depends on what zoom levels and what geographic
areas your data covers, and the speed of the computers you're using to
render the tiles. I'd advise you to do your own experiments. To
quickly render a lot of tiles it would be good to look into using a
farm of tile rendering servers and an intermediate caching layer.
2. Gheat will work just fine with the 3.0 version as all it does is
make 256x256 png images and put them in a directory with a predictable
naming scheme. Here's the documentation for that.
http://code.google.com/apis/maps/documentation/javascript/maptypes.html#CustomMapTypes
3. Check out
http://www.wheredoyougo.net/ which uses gheat for app
engine. (A modified version I believe) The code for gheat-ae is
available
http://code.google.com/p/gheat-ae/source/browse/#svn%2Ftrunk%2FgHeatAE%2Fsrc%2Fgheatae
it's just the project summary page that's blank.