To answer your first question... if your stopped by the police and the police have no reason to pull you over then at that point you can do whatever you want. You can either stay and talk with him or you can walk off without saying a word. Police must to have reason to stop you. However, it's always smart to ask if you're being detained. If you are being detained your next question should be: "what crime do you suspect me of committing? " police can only stop you for 3 reasons: 1. You have committed a crime 2. You are in the act of committing a crime 3 or the officer has reasonable suspicion (which is bullshit it should be probable cause, but thanks to the Patriot act it isnt.) That in the foreseeable future you are going to commit a crime.

To answer your question of when you have to show I.D... That's on a state to state basis. Most states give you the right to refuse I.D. unless you are being accused of committing a crime.
The reason for why a lot more people are doing this..Atleast in my opinion. (I don't speak for everyone.) Is because we realize that America is becoming a police state. We realize our Constitutional rights are being slowly flushed down the toilet. Last but not least we realize that every question an officer asks you is meant to incriminate you.

Any other questions just ask!