at least in the Guangdong province, many people can read traditional characters, have no clue about writing them but if you can read then chances are you can write. Also, many people speak Cantonese. I can also see in Hong Kong that there is not much consideration to those who only can read simplified, restaurant menus are often just in one character set, despite Hong Kong having millions of mainlanders visit every year. (they of course hate mainlanders so it may be a deliberate strategy) 

My business card is written in English on one side and traditional Chinese characters on the other. When asking for a "fapiao", it is astonishing how many Chinese Mainlanders cannot read the company name because it is in Traditional not Simplified characters. The great thing is it annoys the excrement out of them when a foreigner has to tell them what the character is.

Most of my  mainland Chinese friends can ready traditional characters but have trouble writing the more complicated ones. I think it helps that they're more familiar with the radicals/pictograph elements of the traditional characters so they have an easier time making them out. I have no idea if they ever formally learn traditional characters in school though. Like you said, they probably pick it up from the hundreds of hours of KTVing that they do.

Just asked my wife, she can read it but cannot write it, and apparently it isn't taught in schools in mainland China and hasn't been for quite some years, (i.e. it wasn't taught when she was at school and still isn't). To quote my wife "it's used in Hong Kong and Taiwan."

BTW, as we live in and my wife's hometown is Nanning my wife's first language is Cantonese her second is Mandarin and her third is English.

No, I don't think they can. I read that some where that the old tradition writing and reading is fading off. I heard that even now it's hard for the new generation to even read and write the simplified chinese these days>

No sure about others, but most of the people I know in Guangdong can read traditional Chinese easily, including myself. As for writing, not many.

most of the old people can read that stuff and a lot of them can write it, most people in general have come across traditional stuff somewhere, be it written on decorations or a company name or logo, and i guangdong all the ktv places only use traditional writing, and even when i use wei xin i see a lot of my friends use traditional stuff to make posts but i guess its still not writing it by hand, i actually like the old stuff much more interesting 繁體字很漂亮