recursion and propogation

[Glenn Vidad]

from a 40,000 foot view, does recursion directly affect propogation?

we're a small ASP, and although we don't provide dns resolution to our
clients
we only host their domain names (did that make sense?)...  we do, however,
provide dns resolution internally.  i was thinking about going the way of
the 
workaround by adding...

options { directory "/etc/named";
        recursion no;
        allow-recursion { 192.168.0.0/24; 10.1.1.0/24; };
};

to our named.conf file.  will this do the following.
allow internal users to use our nameservers for name resolution?
block internet users from using our nameservers for name resolution?
still allow zone transfers and propagation once a zone file is modified?

i'm hoping the answers are all yes, but while discussing these issues
with other people inhouse, i've gotten confused specifically with the
3rd question.  i think it should still work, others question my conclusion,
and i'm not wanting to take the risk and give a guarantee that it will work.
any help is appreciated..