And because it's a slave device, will it still work with my iPhone23? Or am I expected to buy a new watch every three years?

Apple does have pretty long term support for some of its more expensive gadgets. For example, the original iPod still works with a brand new Mac, using iTunes (assuming you have a firewire adapter). Also, it sounds like the iPhone itself is doing most of the processing for the watch, so it's reasonable to think that even the gen1 device should remain useful for several years. Hopefully it isn't an iPad 1 though.

iTunes 10.7 user here (the last version before that crappy redesign). iTunes 10.7 is now 2.5 years old. Since yesterday I cannot access my iTunes account details anymore. App just keeps asking for my password again and again.

Don't expect your watch to have support for more than 2 years.

What if you update it ? Software sometimes requires some crucial back-end changes and can't be supported to infinity.

Apple is going for a paradigm shift with how we view watches; similar to what they did with the iPhone. It is best not to think of the iWatch as a watch but rather as a 2nd screen for the iPhone with sensors and haptic feedback.