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Any subscription purchase stacks with what you already have. So, if your subscription ends in December 2012, and you buy another year, the enddate will shift to December 2013.
And yes, if you really want to, you can puschase multiple years, but so far, each year there has been at least one great offer (like the 15 months last year, the 25% rebate this year, or the Credit card offer the US has currently). Just keep in mind that the service will at least continue until 2015, but Sony has made no commitment for PS3 support thereafter.
My nephew just renewed his playstation plus but borderlands time limit says it exspires in 21 will he lose the game
As above don't worry about it, the content on my system has multiple expiration dates I keep topping up my PS+ sub when offers arise. The dates will sort themselves out as long as your signed in to PSN.