[MetaCosm]

1&2: Hourly is just a mark that the guy who wrote the article is clueless, he meant Time and Materials of course. Hourly, Daily, Weekly, Monthly, lets not worry too much about he subdivision of labor.

3: This is true, but it puts an ugly arrangement, you want to overcharge as much as possible, and work as little as possible. The client wants to "drag out" the contract to try to maximize the value of their investment. You are enemies from day 1.

4: This is 100% true, but unrealistic, the client often doesn't know what they want, they want you to help "defog" their vision and express it in technical terms.