Does the onactivate command work the same when taking an item out of an inventory?

No... the item itself doesn't activate in inventory. Then you're stuck with something like OnPCDrop or OnPCEquip instead.

Nope. If you're checking for when the player drops something, you'll need OnPCDrop, which is a short I believe. If you're checking to see if the player doesn't have it any more, you can do a GetItemCount. How does the player loose the item? If it's via script, you could always set a global variable if another script needs to know that the player doesn't have that item.