http://img193.imageshack.us/img193/1444/dmch.jpg

Here's a screenshot from live showing a much higher damage range than the base 3750 to 6250, damage values multiplied by the amount of benefit I gain from mastery. Unless the tooltip is incorrect, it's probably safe to say that mastery does affect the proc. I have personally tested and seen that nearly every other readily available elemental damage proc receives benefit - Icebreaker, Fiery Weapon and Darkmoon Card: Maelstrom.

I have no solid information on the proc behavior, but what little I've been able to find suggests that it follows basic PPM rules, with a one proc per minute rate and no internal cooldown.