It's a bit like going to the dentist - you can hear and see them working away, but it is never more than mildly uncomfortable. The process is groovily psychedelic - you can see the weirdest light show going on. Oh, and there is the slightest burning flesh smell, but nothing overly concerning. I've heard a few horror stories (my brother used to service the laser machines so heard the odd bit of gossip) but apart from a halo effect (especially under unnatural light) for the first couple of months I have never regretted getting it done.
No, everything goes black when they lift up your cornea. For me, that was the most frightening bit, everything going black suddenly, but knowing my eye was still open. The procedure took 60 seconds on each eye though, and then my sight came back straight away.