From MSDN:
The Timeout property specifies the time-out period assigned to the
Session object for the application, in minutes. If the user does not
refresh or request a page within the time-out period, the session
ends.
So in answer to your question, the timeout is reset if the user sends a request to the server by either navigating to another page or refreshing the current page (or possibly by using some form of AJAX keep-alive method (See this question)).
This article on Code Project provides a pretty good overview of Sessions within ASP.net
For your second question, this gets a little complex as the session timeouts are managed by IIS so your page has no idea how much longer the session will be valid for. I have seen examples where another timer is placed with in the page itself and when this reaches a certain low value the user is warned that their session is about to expire. The page could then refresh (resetting the session timeout value in IIS) and the user wouldn't be logged out / lose their session.
However, this will require the session timeout value that is configured is kept in sync with the value configured in the JavaScript function.