I use an iPhone and a Android tablet so I don't use Cerberus. However from my understanding.
1. You can wipe the phone and SD card with Cerberus. It doesn't require an internet connection either a SMS message will activate the app (no alerts are given on the phone either). You will also be alerted if someone puts a different Sim in the phone.
I never messed with the built in encryption. Once you encrypt you need to do a factory reset to decrypt. I don't care about the security of my tablets data that much lol....
Once you encrypt, you need to do a factory reset ... if you screw up with the password -- I found that one out the hard way
From what I understand, the difference between an encrypted and non-encrypted drive wipe is the speed. With the encrypted drive, all you need to do is wipe the key, and the drive is effectively erased. With the non-encrypted drive, wiping the drive could take hours -- presumably which the criminal could detect and stop before it gets too far.
I've been moving more and more of my life management onto my my computer (which is sort of the point of having one), and now with these pocket devices easily plugging into all that, I'm seriously looking at how to secure them too.
2. You'll need to delete the app on an administrative level to remove it. It can be hidden fairly well but if you have a new phone you'll likely wipe it and use your own Google account. You'll have all the pins/passwords you need at that point plus a new phone number. I'm sure in certain circumstances you could mess with someone but no easier then doing the same with find my friends or find my iPhone.
With Find My Phone, you can track location and wipe the device, but not do all the spying that can apparently be done with something like Cerberus.
The way to defeat the app would also be just as available to the criminal as it would be to a legitimate purchaser.
Ultimately, I'd say the best way to protect your data is with encryption and a strong password. Having a good option to remote wipe is a plus too. The spying stuff sounds kinda neat, but it's a two edged sword. Anyway, you're not likely to get your device back if stolen ... unless you're lucky enough to have a moron for a thief .