I believe you are given 7 days to leave once cancelled. If you try to leave without cancelling it, they may not let you exit the country (happened to a friend of mine).
I have been asked for my passport at every hotel I have stayed at in Thailand. Sean, yeah.... never heard of a Thai being fined but, maybe it happens and we just don't know about it. However....much easier to fine foreigners when they're sitting in front of an immigration officer holding your passport ;).
Here's a brochure that was put in the mailboxat my condo for your reading pleasure.
I've never heard a case of that happening because the hotel would face hefty fines (up to 10,000 baht I believe) and even possible jail time. If it happened to me I would tell the immigration officer the situation and hope they would go after the hotel. If I had to pay a fine I would be complaining to the hotel...although it likely wouldn't help.
Correct Roger. Guesthouses and hotels have an online system they use to report your stay with them so you don't have to file a TM30 if you stay at a hotel.
If you're living in Chiang Mai or Pattaya and staying in a private condo/house you're going to have to report to immigration within 24 hrs every time you enter Thailand to get your TM30 updated. You can skip this if you never plan to go to immigration but, if you ever need something like a Residence Certificate for your driving license or to purchase a vehicle, you will need to go to immigration for it and will be fined. Technically you need to report in all jurisdictions but these are the only ones that seem to be handing out fines.
You don't need to do a visa run. Get a Single Entry Tourist Visa at the embassy in England. That will get you a 60 entry stamp. Then, before the 60 days is up, you can go to the local immigration office in Chiang Mai, pay 1900 baht and get a 30 day extension.
If you think you'll be staying longer or travelling to other countries, get the Multi-Entry Tourist Visa which lasts for 6 months and every time you come into Thailand you get a 60 day stamp (you can extend any of these entries by 30 days at local immigration).