Okay... to answer the questions:
As far as using a scope, a scope is only magnification. Eight times magnification is eight times, be it a one inch target at 10 yards or a 40 inch target at 1000 yards. THe end effect is still the same. So yes, what you see through a scope at 10 yards will simulate the marked distance.
As far as the second question is concerned, vision is logarithmic and changes with distance. A person does not appear two times larger at 100 yards than at 200 yards. Nor does he look twice as small at 400 yards.
There is a formula using IOA (Inches of Angle, the same thing as Minute of Angle to us shooters) and while I cannot remember what it is, I can make a 50-yard target for you and post it on my site, if you wish. Or any distance, for that matter. Just tell me what range you want to put your target at and what distance you want it to simulate.
If you want to learn more in Inches of Angle, there is a company called Horus Vision (www.horusvision.com) and they sell the best damned scopes on the market - so good, in fact, that I went and became a dealer for them (Using thier scopes in unknown distance matches is like cheating... it's wicked fast to hit a target, too. Read the unfinished review on my web site for more information - www.geonavigation.com - Go to the reviews section). Anyway, the manual that comes with them is so incredible and explains the reticle functions so well, it makes it easy to learn. I think you can even download the manual right from the web site.
Anyone who is interested in a scope should check these out. Even if you buy from the manufacturer, there isn't a better scope on the market in it's price range and absolutely no better reticle on the market for any price I know - I have had A Nightforce NSX, Leupold MK4, a few US Optics that were much overrated, and a ton of other scopes).