The thanks button doesnt over-rule the reputation both exist. However the "Thanks" is public (and it can be taken back after being given).
You need 50 posts.
The post must be less than 3 days old. You can use rep after that.
It does not reduce the number posts on a thread, it may make it a heck of a lot longer though!
Theres no limit on how much thanks you can give/spread unlike reputation.
Pierce