Medieval II Total War Questions

These are probably stupid questions, but I just started playing it so I have a good excuse
1. How do I disband troops? I hired a bunch of mercenaries on a crusade and once it was over, I didn't know how to get rid of them (other than suiciding, of course).
2. If I enter into an alliance with another faction, does that only mean that we have better relations and won't attack each other, or does that mean that I'm supposed to go to war with anyone they go to war with?

1. How do I disband troops? I hired a bunch of mercenaries on a crusade and once it was over, I didn't know how to get rid of them (other than suiciding, of course).
2. If I enter into an alliance with another faction, does that only mean that we have better relations and won't attack each other, or does that mean that I'm supposed to go to war with anyone they go to war with?