I'm curious as to how this "kill switch" might work. It wouldn't just cut off the whole house would it? Surely not.

Actually yes, the "kill switch" will just turn off the whole house. Those of us old enough will recall the 70s when the miners had a work to rule and we ran low on coal - rolling blackouts where they'd turn off districts for 3 hours on a rolling schedule. The kill switch in smart meters will allow them to do this on a finer scale - down to individual supplies. In practice I guess they'd do areas at a time, but they will have the ability to (for example) keep supplies on to certain properties such as those with elderly or sick people. Obviously the plan is to manage demand without this, but if it comes to it as some forecasts predict, then this becomes the ultimate in demand management.
The German smart meters have the facility to turn on and off individual appliances ie freezer fridge etc so can work well with own generation.
Ours will as well, but it will rely on new appliances getting smart and being able to communicate - there will be a "home area network" between meter, display unit, appliances, etc). As the meter standards have only recently been finalised (I think), it's going to take time for appliance manufacturers to engineer in this ability - and then of course it will take time for those appliances to filter through. Of course, those of us who recall the digital TV fiasco will recall that up until fairly close to digital switchover (in my area, Granada which was the first to switch), there were analogue only TVs still being sold and digital sets had a fairly significant markup.
I can see the same happening with "smart" appliances - manufacturers will put a markup on them for both the engineering cost and the perceived extra value. Given that the people who would benefit most from the savings will be those unable to afford the extra cost of the appliances ...
I've been wondering about this. Smart meter are supposed to be an important part of demand management. But how, exactly, is it supposed to work? Do the meters simple allow complex time-based or variable tarrifs (which require people to know/look at meter/be in/care) or is there an automated mechanism as part of the protocol, which sems to be what RJ is saying they have in Germany.
The meters will be capable of 48 time-of-day charge rates, or 8 block tariffs (ie the first x units/per period will cost y, the next z will cost ..., and so on), or IIRC 64 combination (8 time * 8 block) tariffs. And people complain that our current tariffs are too complicated

In addition, it will be possible to apply emergency tariffs - so if demand suddenly jumps, or a significant supply is lost, then the price can be hiked to suppress demand. As the meters will be networked with attached loads, the loads can then act on triggers (such as current price or remote requests to shed load) and adjust their operation.
So yes, when demand spikes as people make a cuppa during half-time, loads of heat pumps may shut down for a few minutes.
And all the meters will be capable of being remotely switched between account and pre-pay - which is one benefit since it will be less costly to switch meters, which should be a benefit to pre-pay customers, and to those that take over a supply after them and want switching to an account meter.
The theory is that people will adjust their demand to suit, and some appliances will be capable of being configured to only run when the price is below a certain level. Well that's the theory at least - but since the appliances will be a while coming, I can see it being an excuse to fleece customers who will have little control unless they sit watching their monitors.
are the new smart meters capable of receiving information through the power grid ?
It's going to be done via the mobile networks in most cases.
smart appliances are a much better idea... if your fridge monitors the grid frequency and decides if it needs to run or not.... it's as easy as adjusting the thermostat based on grid frequency... grid is low, add one degree 'c to desired temp, grid is high lower the desired temp by 1'c
...
electric heaters... don't need to turn them on/off, just adjust the thermostat as above...
...
electric car charging... do the same
...
and that's just the 'at home' stuff... once shops/industry starts with the same it'll make a massive difference too... I have about 100kw of fridge compressors at work... I'd be more than happy for them to be up or down by a few degrees - makes no difference to me at all... and I'm just small scale...
Yes, that's the plan. But it requires all these devices to be smart. For some loads (eg immersion heaters) I would expect stand alone switch units to start coming on the market - but it will still cost money to have them fitted, the majority won't have the electrical skills to fit them themselves.
but no manufacturers are going to install anything like that until someone tells them they have to.... which leaves it to the government.... who will no doubt balls it up

Not just the manufacturers - take your example. You have all that refrigeration plant that's working just fine. Are you going to go out and spend a lot of money upgrading it without some incentive ? OK, if you have to replace it (or at least it's control system) then you may consider the incremental cost worthwhile, but I doubt you'd consider an upgrade just for the smart grid aspect. There are loads of heating and A/C installations in offices that could co-operate in this way - but it will cost a lot to upgrade them all.
At present all I can see is stick, very little carrot. The sticks are that if you don't adjust your consumption then you'll be hit with bigger bills, and in extreme may even be cut off. In any case we'll see complex tariffs that will make our current "complicated" ones seem oh so very simple. The carrot is ... err .. well if you spend extra on your appliances and/or sit there watching the display, you might save enough to cover the investment.
Don't get me wrong, it'll happen eventually. But I think it's "quite optimistic" to think smart metering is going to save the day in five years time when some forecasts suggest we may have a supply deficit. The meter rollout will only be part way through - it's due to be complete by 2020 but hasn't really got properly going yet. It'll take longer for smart appliances to be commonplace.
There's a danger that if you apply too much stick, and not enough carrot, that unexpected consequences happen. For example, if you make electricity expensive enough and/or power cuts frequent enough (especially the latter), then you put an incentive in place for people to setup small generators. Even if it's a diesel and has heat recovery, it's going to have a negative effect on the primary reason for going "smart grid" in the first place - which is to reduce CO2 emissions - if lots of people then use small gennys to deal with the ensuing downsides.