If and when the watch looses GPS signal it will switch to the internal accelerometer or foot pad if connected. It does this automatically and will revert to GPS once it regains signal. I have a foot pod and leave on my shoe all the time for this very purpose. In reality, I feel either one will be good enough so maybe don't spend the money on the foot pod yet and see how the accelerometer work for you first.
I have the foot pod and the tempe but I am a dork and I like gadgets so take that for what it is worth.
I currently have it set to Always for both pace and distance. Do you know if that overrides the GPS or do they somehow work in conjunction with each other?
This particular setting means that pace and distance are calculated based on footpod, and GPS is ignored, even if available. GPS is used, however, to automatically calibrate the footpod and to give you a track on the map.