1. I suspect people don't generally go actually crazy, because then, um, all mothers would be crazy. But your brain does forget the pain after. Well, usually - my brother-in-law's mother still remembers giving birth to him with perfect clarity, and refused to go through it again.

2. A lot? I don't know. I'm told you don't really notice tearing that much because everything's that much of a painful mess down there anyway. If it's bad they stitch. My mate managed to tear her labia giving birth; it's the one thing I've come across that evokes a similar reaction in women to men and testicle-kicking.