You can call the CIC call centre and ask them if you need an affidavid for losing your passport. Maybe it's not a big deal. Probably you'd get one from your embassy.
When I did the test, it took a long time to check everybody's ID, probably over an hour, maybe more like hour and a half. In the meantime, they pulled out everybody from the queue who was over 54 because those are the people who don't have to take the test. I don't really know if they have an interview instead as I was waiting in the queue. They were invited into the test hall and some of them were sitting at a desk by what may have been a citizenship judge, I am not sure. I wouldn't say I saw anybody sitting there for very long. After all ID's have been checked and all the over 54's are out of there and all the people taking the test as sitting in the hall, they will do a little power point presentation on how you take the test. It's multiple choice and you use answer sheets for computerized processing. Think darkening circles with pencil #2. There are various versions of the test so you can't cheat by looking at your neighbour. After you have finished the test, you can hand it in and go.
If you fail the test, you will get a 2nd chance by interview but then they will invite you for one at a later date. I don't think they do those at the same time as a test. It would be too confusing. If you pass, you get a letter inviting you for the ceremony where you actually become a citizen.
Good learning material for the test can be found at http://www.yourlibrary.ca/citizenship/ Just pick all questions and go through it until you know them all except ignore the questions specific to Richmond (unless that is where you live) and replace them with similar questions about your area and research the answers. The citizenship questions are very similar to that. Most important to know are the questions about your rights and responsibilities as a citizen as well as voting.