I'm not sure of the answer to your first question. (Are you saying the 29 is generating a 2 watt carrier, and hits 122 watts on modulation peaks? I'd give anything to see what that looks like on a scope.)
But for your second question, no, your friends with AM receivers would not be able to understand you if you were to try talking to them on SSB. You would sound all muffled to them. An AM signal is basically a combination of a carrier and two sidebands, which is why you can hear AM signals when your radio is in SSB mode: you're listening to one of the sidebands. When you're tuned to ch. 12, you're still on the same frequency no matter what mode you're in (AM, FM or USB/LSB): the difference is just the form of modulation. It turns out that with AM, you're actually transmitting the same audio information twice, once in each sideband (the second sideband is just a mirror image of the first). SSB was developed as a more efficient alternative: the carrier and one sideband from AM are suppressed, leaving just a single sideband signal. (AM was developed first though, because it was the easiest modulation technique to implement.)
Unfortunately, CB radios tend to be notoriously bad when it comes to frequency stability. Sometimes they drift a lot. Sometimes the factory calibration is just off. And sometimes unlocked clarifiers get bumped accidentally. You don't notice it with AM or FM, but listening around with my Kenwood TS-850 on SSB, I very often hear CB stations off frequency by as much as several hundred Hz, or even one or two kHz. This makes multi-way SSB conversations a bit of a challenge: getting everybody on the same frequency is like herding cats.
Anyway, listening on SSB is actually a good way to tell when you're right on frequency with someone. Try the following:
1) Pick a given station transmitting on AM
2) Set your radio to LSB and adjust the clarifier until their voice sounds natural (i.e. not high pitched or low pitched)
3) Now switch to USB and check that it sounds the same as it did in LSB
4) Now switch to AM and check that it sounds the same as both LSB and SSB
Once you get the clarifier set so that the other person's voice sounds the same on all 3 modes, you should be right on the same frequency as they are, or at least really close (within a few Hz). With general coverage HF rigs, this trick is often used in conjunction with WWV for master oscillator calibration. (WWV transmits _exactly_ on 5, 10, 15, 20 and 25Mhz, which makes it a handy reference for those of us who can't afford a high stability frequency standard.)
You may have a little trouble doing this if your radio is prone to drifting a lot. I'm not sure how good the Magnum is in this regard. Also, once you get one station tuned in, any other stations you hear will probably sound like they're a little off. Again, that's to be expected with CBs. Even ham rigs aren't immune to this, but at least with some ham rigs you can get a high stability oscillator add-on, which can help a lot. That's usually only an option for more expensive ratios though. I doubt they'll ever have such a thing for typical CB rigs, but I wish export radio manufacturers would start offering them as accessories. (I'd take one over an echo/reverb circuit any day.
)
Note that there is a case where your AM buddies might be able to hear you on SSB, and that's if you transmit while someone else on AM is keyed up. Anybody else who hears your SSB signal and the AM carrier at about the same strength will hear both mixed together, and will be able to understand you. This works best if you tune into the AM signal closely, as described above. I've done this a couple times to get through people jamming channels with dead keys.
-Bill
Thats all the information I was looking for and some I wasn't but, I sure am thankfull for all of it. 
