A) No, you can't use a 1.5 ms square pulse, you have to send 1.5 ms pulses with 20 ms pauses in between. You could use the power supply instead of batteries if you want to.
B) The 1.5 ms pulse is send to tell the servo which position to move to. The usual range of pulses to control servos is from 1 to 2 ms. 1 ms pulses will send the servo to the 0 degree position, 2 ms pulses will send it to the far end, usually 180 or 360 degrees. Sending 1.5 ms pulses will tell the servo to go to the center position. By modifying the servo, it will always think it is in the center position.
Servos spin faster if their destination is farther from their current position. So by sending a 1 ms pulse you'll send it one way as fast as possible, and by sending a 2 ms pulse you'll send it the other way, and at 1.5 ms it will stop because the pot tells it that it's at the center position already. So, by varying the pulselength you can control the direction and speed of the servo, because you are basically changing the amount of degrees it has to rotate to reach it's destination, which it will never reach as the pot is fixed in the center position.
Hope that helps!