To get only 5 hours use from the iLiad, you would have to be using the stylus ALL the time, and Wifi and so on... otherwise, with a more "normal" use (occasional stylus/connections) I'd say the range is 8 to 12 hours (more with the extended battery, when we get it!).
And no, the iLiad doesn't use up its battery if it's switched off (except for normal battery discharge, like for any battery out there).