Joanna,

The best place to look for both these answers is in the PMP Handbook:

www.project-management-prepcast.com/pmphb

Page 8 top answers your first question: The experience does not necessarily have to be paid work, but it does need to be in a professional setting.

And in regard to evidence the hours you claim, PMI starts from a position of trust. But, if your application is audited, then your contact persons (you name them on the application) will have to confirm everything in writing.

Does anybody know if the hours contributed toward leading, managing and directing a project need to have been completed on a professional project?
Also, what evidence of the hours spent leading, managing and directing a project are required?