1. The transfer process is fairly straightforward, and is usuallt accomplished via your hosting company, or the company that is currently 'parking' the name. Most companies have an online form, and you will usually have to follow this up with an email acceptance of the transfer request. You can't transfer names within a certain period after registration, or prior to renewal - full details of the various restrictions will be available from your host.
2. Yes, you can sell your interest in a domain name - either privately, or by using one of the many escrow companies that specialise in the process. In essence these companies make sure that money and name 'cross in mid-air', so that neither party can take money or domain name without fulfilling his/her half of the bargain. If you transfer a name without first making sure you have (or will get) the money you can have quite a job sorting things out, especially if you sell to someone abroad.
3. What you sell is your interest in the name for the unexpired part of the registration period. You are correct in saying that you don't actually buy the name when you register it - you simply buy the exclusive right to use if for a specific period, and to renew that right at the end of the period, provided you pay a renewal fee. The name isn't yours - the right to use it is.