Under what circumstances is a declare allowed to "pause" upon seeing the dummy?
Always - it is a recommended action.

As Declarer I always pause for the 5 or so seconds you recommend when Dummy comes down; as East I will do so (by initially playing my card to the first trick face down) whenever Declarer has been so discourteous and undiscerning as to not do so. Occasionally I have to pause longer, for particularly complex hands, but I do so with the understanding that I have keyed this difficulty to the opponents, perhaps earlier than they otherwise would have.

Because of restrictions on Dummy during play of the hand, Declarer need not be concerned with the provision of Unauthorized Information to partner. However there is great benefit in not keying moderately difficult hands to the opponents. Develop the habit of always studying Dummy before playing to the first trick and your results will improve slightly.

It is always improper and potentially unethical for Dummy to play a card from Dummy before said card is specifically called by Declarer - even if that card is a singleton to be played to the opening lead. It is very possible for Dummy to provide Unauthorized Information to Declarer, and that is a reason for many of the restrictions on Dummy's actions during play of the hand.

from Laws of Duplicate Bridge - 2008


  Law 41 - COMMENCEMENT OF PLAY
  
  D. Dummy's Hand
  
  ... Declarer plays both his hand and that of dummy.
  
  Law 43 - DUMMY's LIMITATIONS
  
  Except as Law 42 allows:
  
  A. Limitation on Dummy
  
  
  (c) Dummy must not participate in the play, nor may he 
  communicate anything about the play to declarer.
  
  
  B. If a Violation Occurs
  
  
  Dummy is liable to penalty under Law 90 for any
  violation of the limitations listed in A1 and A2
  above.
  


The above is very clear. If my partner ever suggests the play of a singleton from Dummy (which as noted above is all that Dummy can do, as only Declarer is able to make a play from Dummy by specifying the card.) I will call the Director myself to further reinforce the inappropriateness of the action.