The link is a few years old. No idea if there is a current version that works on modern phones, but it seems reasonable to assume there would be.
The first part talks about bluetooth pairing with the device - which requires unlocking. The second page talks about unlocking an iPhone with plist files from a synced computer. So it's not a matter of some magical device that can backdoor a phone - but rather using interfaces that already exist.
I found this company [2] and it has the usual marketing ploy - but a quick google search doesn't reveal any actual reviews of people using it. I can paragraphs of marketing spin but no one actually saying "we used this to get into cell phones that were password protected".
I'm not saying it's not possible - I just find it hard to believe without it making modifications to the underlying software (ie flashing a ZIP on android that zeros out the pin password or something).
[1] http://arstechnica.com/tech-policy/2011/04/michigan-state-po...
[2] http://www.cellebrite.com/Mobile-Forensics/Products/ufed-tou...
No, they don't need to use any kind of exploit. They have hardware that allows them to clone the the device's memory. I doubt it has to be on at all.
There's no way to secure a device if the attacker has physical access. The best you can do is secure the data with encryption.
Depends on the situation. If it's a raid due to software piracy - then probably. If they pulled you over for speeding and arresting you - they probably won't or even know what to look for.
And I really can't think of a way to clone a device like an Android device without unlocking it. ADB now a days requires your explicit permission from a prompt. And if you are like "oh they have ways" I would be very interested in that because that sounds like whatever they are doing are using an exploit or some sort of back door.