> Not having one in front of me, I can't say for sure, but they have to sign the cert for the origin domain or the browser wouldn't give you a padlock when you went to the origin domain.
Correct and under this scheme you wouldnt have a HTTPS connection with the origin site by default. The automatic configuration of Universal SSL is their "Flexible SSL" set up, where Cloudflare communicates with the origin server unsecured, but the connection between the client and Cloudflare is secured via a generic SSL issued to a subdomain at Cloudflare specific to each user account/domain.
If users tried to hit the site directly (such as when Cloudflare throws up those overload errors where you are able to circumvent their network) they would not get an encrypted connection.
If the customer then sets up a certificate on their own server then they will have a "Full SSL" connection, aka end-to-end encryption. The details on how this can be set up for free are forthcoming from Cloudflare.
There seems to be three ways of doing this: Their contact with Comodo/Globalsign also allows for more certificates issued directly to the origin domain; the origin domain will use a self-signed certificate which Cloudflare's network will trust (also will keep the origin domain reliant on Cloudflare to get trusted HTTPs); or they could be using StartSSL's free certs but given their partnership with Comodo/Globalsign this is unlikely.