For clarification, are all the different channels simultaneously present in stable release that regular Joe's dl and install, just hidden by by pref/build option/cl-flag switches?
For example, when you say developers don't have to decide which version to install, but only which channel to follow, is that how they switch among channels - just restart the stable version using a different switch?
No, the update channel determines which code is downloaded to your computer. The "stable" and "beta" channels receive builds from release branches, while the "dev" and "canary" channels receive snapshots from trunk.
Regardless of your channel, you can turn on different features in Chrome by going to "about:flags" (or sometimes by passing command-line switches) - but only if those features are in the build you are running.
For example, when you say developers don't have to decide which version to install, but only which channel to follow, is that how they switch among channels - just restart the stable version using a different switch?