I have never been accused of cyber squatting, but I did have to deal with an accusation of 'typo-squatting' once. It was really minimal, and the domain just got blacklisted at Sedo. At the time, I wrote about it here:
http://www.domainsocial.com/legal-di...complaint.html
To answer your question as to what happens when you are accused of cyber-squatting: you usually get a complaint from the trademark owner. Then the trademark owner can file a complaint with one of the ICANN approved Dispute Resolution Mediation Service Providers. A panel (sometimes only one member) will review the complaint and then make a decision as to whether or not to transfer the domain.
You should be aware, however, that trademark owners usually win.. no matter how absurd their claim. However, if you are blatantly cyber-squatting, then that is use of the domain in 'bad-faith' and you will definately lose.
Zach