How reliable is ICS face unlock?
The ICS' config screen says it's for low security situation. It shouldn't be used for cases where you have sensitive information, and more for the casual user that uses their phones for personal photos; not the type who carries their company's next secret world domination plan. While face unlock is a gimmick, it's a cool gimmick nevertheless, and I'm sure it will be used by the casual users who values convenience more than security, as it is basically an automatic unlock for them.


  If it fails to unlock automatically, is there a fallback password/pin
  mechanism to unlock the device?


Not sure about that; but all stock unlock mechanism has a fallback to unlock using your Google Account username and password. I don't see why they wouldn't do that with face recognition.