No, Tiger will replace Panther on your system, meaning that the current System folder becomes Tigers System folder.
But it will retain all your Applications, User accounts, Music, Photos etc...
It won't be a separate system - it merges with your current system and brings in new functions and will install new version of certain apps (Mail for instance).
If I remember correctly, I do believe apple said that they were going to slow down the release frequency of osx.
I think they said that after Tiger they will slow down the upgrade patterns. But I suppose that also depends what innovations the competition releases...
I also think that the current update cycle is quite a good thing - You can always skip an upgrade if you want and won't have many compatibility issues...
And if they release a feature that you think is really beneficial to you, you have the option of buying it.