Consider you use A* algorithm in which heuristic can overestimate the remaining distance by a few meters. Can it happen that the final path is several kilometres longer than the really shortest path? Can you give an example of graph in which this happens, what kind of graph is it? A scenario in which Euclidean (straight line) distance can overestimate the remaining distance is:
Is there a formula which says the upper bound on suboptimality of the final path given the upper bound on how much A* heuristic overestimates the remaining distance?
A* returns when the partial answer it retrieves (which is the partial answer with smallest estimated total distance to reach the goal) has in fact reached the goal. Standard A* guarantees to find the correct answer because, by the definition of the heuristic, all the estimated total distances to reach the goal are lower bounds, so none of the other answers can do better.
Suppose the heuristic for an answer which in fact will end up with total distance T can be up to KT, where K > 1. If A* retrieves an answer with cost KT and thinks it has succeeded because the answer reaches the goal, then it might not be the best answer. We know that every partial answer still in the pool has cost at least KT, but because of the heuristic, an answer with heuristic KT might actually turn into an answer with total cost T < KT (but cannot turn into an answer with any cheaper cost). So with this sort of heuristic, you the answer returned by A* can be up to K times as expensive as the best answer, but no more.
This is actually summarized in the Wikipedia entry at http://en.wikipedia.org/wiki/A_search_algorithm#Bounded_relaxation - using such heuristics deliberately is one way to speed up A at the cost of returning worse answers.