I have taken the bus from ABE to EWR for years so I can confidently answer your questions:
1. Check at ABE is just like a convention flight: ticket counter or kiosk. Bags are checked through and boarding passes issued for connecting flights. The bus operates with a "flight" number for just these reasons. The big difference is that security for pax is done at EWR, as the bus loads on the departure level roadway at ABE groundside.
2. See above. I rarely check bags but by observation, TSA checked bag screening is done at ABE; bags are loaded in the back of the bus and the compartment sealed. Once loaded the bus driver cannot break the seal and after off-loading all pax (Groundside Terminal C) bags are taken airside and handed off to the Continental bagge system (with all the normal perils associated with checking bags.) On return, connecting to the bus (normally operates as a "flight" from Terminal C, gate 114) bags have been loaded onto the bus prior to picking up passengers. The more diligent bus drivers take a final pass at the appropriate spot for ABE bags looking for any last minute bags.
3. Baring unusual traffic and accidents the bus usually leaves exactly on time and arrives early. You should be fine with your 55min connection. It is almost never canceled (except for snow storms!) and typically arrives at EWR 10+ minutes earlier than scheduled. Several years ago I had a flight to ABE - EWR - CDG in BF (not the bus of course!). The inbound bus had been hoplessly delayed behind an accident on I-78. ABE COEX staff (who are great and on a first name basis with me) got me a local cab (at CO's expense) so I would not miss my connection. On a return once, I missed the last bus back to ABE. Headed to the PC to get a drink and call Hertz to rent a car. The agent at the PC called Ops and had the bus turned around & sent back the gate to pick me up. There where a bunch of PO'd pax on the bus, but I got home.
4. I have never missed a flight because the bus was late. However I think they would treat the missed connection like any other flight. I am not sure what the rules would be for stuck in traffic (weather delay?).
Some other worthwile points.
- Both at ABE and EWR it is always boarded at the very last minute, typically 5 minutes prior to departure.
- There are always some disgruntled pax on it upset that is actually not actually a flight. I used to try to explain that for a 80 mile "flight" they are better off not getting involved with EWR/NYC area air traffic control.
- You do get 500 miles for it, but no elite bonuses and no elite qualification. They changed that several years ago to nix folks that where using it to snag a few EQP's they needed to make whatever next level they where striving for at the end of the year by riding a few "segments" on the bus. They also jacked up the price to discourage buying round trip ABE - EWR tickets for the sole reason of snagging EQP's. The regular users (including yours truly) where not pleased.
- There are very often Continental pilots and FA's on the bus living in the ABE area that use it rather than driving to EWR.
- Do not expect the bus to be anything splendid. It is not a motor coach, but more like the thing you ride to get your rental car or head out to long term parking. Small. 20 seats. Despite the fact that there will be a seat assignment on your boarding pass, it is open seating.