As far as the used games, it seems fairly straight-forward - there will be a charge for installing a used game, just as there's a cost to buy a used game now. I don't think there's any other fee from what I've seen. The charge is the same as the cost to buy over-the-counter now.
I see two problems here:
* We already see from Games On Demand that the cost of older games is ridiculous. They're asking £20(~$30) for 3 year old games. No-one will pay that. You see the same titles in the bargain bins for £5 or £10, still in the cellophane. Unless the re-activation fee is managed on a per-title basis and kept to reasonable level, no-one will go for it.
* If there's a charge for re-activating a game, there is little financial motivation for the pre-owned industry to facilitate the transfer in the first place. The original owner won't get much return for selling, and the margin for second-hand stores won't be worth bothering with. The whole market will die off, which is probably what MS and the publisher want anyway.