No special effects were used. Stunt drivers drove real F1 cars at speeds over 180 mph, while the actors had to do a couple weeks of training and driving in the race cars. Special attention was paid to capturing the sound of the cars that really puts you in the driver's seat. The Cinemphotographer used a huge variety of cameras mounted in different ways on the cars - if you watch 2013 car racing on TV you will be aware of the amazing places they manage to put cameras these days. So he did that and sent the cars out (a mix of F3 and some vintage F1 cars) to see what happened! There was an awful lot of editing and some CGI - but not at all inappropriate
No: the scene as depicted in the film is fictitious. However several people who knew Hunt (including his son Tom) have said that it would have been in his character to do so. Jerry Garrett, who was the motorsports editor of The Associated Press at the time, has confirmed in his blog that Lauda was asked about his scars at the press conference prior to the 1976 Italian Grand Prix:When Lauda came back from his accident, he was asked at a press conference at the Italian Grand Prix that year if he planned to have any plastic surgery to repair the burn scars. Lauda was angry at the question, and defiant, "No. No surgery. I don't care how I look. How I look now is how I look. If people don't like the way I look, they don't have to look at me."Garrett also references an article following that press conference which was written by a journalist whom he does not identify:Later, I know a British journalist asked in print, "I wonder if Mrs. Lauda has had any input into that decision." Whether this journalist was later introduced to the blunt end of James Hunt's anger, I do not know; but he did not remain on the motorsports beat for long thereafter.It is true that James Hunt had a reputation for a bad temper and for sometimes even striking out at people. After spinning off during the Canadian Grand Prix in 1977, he punched Ernie Strong, a volunteer race marshal who had come to his assistance. Hunt was fined $2,000 for that incident, and Strong later successfully sued him in court.