Second question:
It is burned off as heat in the resistor grids.
The MTA experimented with regenerative braking in the R110A/B prototypes, but it was found at the time that the existing substations didn't like power being back-fed into them through the third rail. I don't have any information as to whether...they've...f i x e d...
...
...(googles "nyc subway regenerative braking)...
...it seems they have addressed that 'problem' (follow link, use your browser's 'find text' function--usually [CTRL-F]--and search "regenerative")
As for brake shoes, you might want to ask that on www.subchat.com . That's the primary hangout for NYC subway enthusiasts, and you might find somebody there who would know. But whatever it is, their rate of wear is likely very slow since thanks to dynamic braking, they only engage the wheels at speeds under 10MPH.
---PCJ