The temporary time/number limit only applies to Photo Stream (to be picky).
Shared Photo Streams have no time limits, though they do have a limit of 1000 photos per album, and 100 albums (if memory servers). Neither counts agains't your iCloud storage limit. These are 'you can't add more' limits. Not 'the old ones get deleted' limits.
The Camera Roll is local storage. Photos stay there until you delete them. They are backed up if you have Photos & Camera enabled in Settings > General > Usage > Manage Storage. I believe this is enabled by default.
This changes somewhat if you enable iCloud Photo Library (beta) in the iCloud settings. If you choose 'Optimize iPad Storage' then older photos will be downsized on the iPad (still suitable for iPad viewing), and the full versions only accessed when you need to edit, copy, or send them somewhere.
Choosing 'Download and Keep Originals' does what it says. You'll have full sized copies on all devices that use the same iCloud Photo Library.
I'm not sure what happens with backups for iCloud Photo Library. I assume you get the full sized photo backed up if you have it on the iPad, and the smaller one if you don't. Since you always (in theory) have a full sized photo in iCloud anyway, it's shouldn't be an issue. If everything works as it should. Which it might not, yet. It's beta.
So, to summarize, you have four things going on in the Photos app.
Camera Roll: (your locally stored photos) Backed up if you have it enabled. Enabled by default.
Photo Streaming: Temporary place for photos, so you can easily copy them between devices and computers. Both in iCloud and on device. May be optimized if very large.
Shared Photo Streams. Permanent in iCloud. Synced to devices that have the same account, or have shared access. Probably not backed up on the device. May be optimized if very large.
iCloud Photo Library: It's new. It's beta. It has strange options that have photos both on your device and in iCloud simultaneously. It's BETA, which means Apple doesn't consider it finished, and that you are using it at your own risk.
Note on albums. There are three kinds of albums. Those created by syncing with iTunes and a computer, those created when you import photos using the Camera Connection Kit, and those created in the Photos app (either by you are automatically by apps).
Of those, only the third kind, the ones create in Photos get backed up. That's because they are only virtual albums, and the images are still in the Camera Roll.
(I'm not certain imported photos don't bet backed up, but until I hear otherwise I'm going to ere on the safe side).
Sorry if this got a bit long. I'm in pedantic mode today.