Found the answers:
Q: What's this I hear about walking?
A: Yes, you may walk around, in both modes. However, once "aiming your camera", you can raise and lower the height quite easily.
Q: So does this mean we have a free-range camera for replay-based Photomode yet?! I hope so.
A: Yes we do!
All info:
http://www.gtplanet.net/forum/showthread.php?t=131913