Hi,
Yes, WCS 4.x can manage 3.x controllers, though (obviously) you will not be able to use WCS 4.0 features that are not supported on 3.x controller code. Generally, Cisco recommends keeping your WCS and controllers on equivalent versions of code. However, there are controllers (e.g. 4100 Series) that cannot be upgraded to 4.0 and other issues that may make it impractical (or impossible) to follow this recommendation.
No, WCS does not automatically upgrade the controllers.
Thanks,
Ben