Ja,
Unforunately, LFS is right. This is pretty standard w/ majors these days.
OOT thread
Similar OOT thread.
I've flown USAir once this year (to Vegas) and they seemed to be having all sorts of problems sorting things out after one flight was cancelled. Generally, if you are flying a major airline out of a city that is not a hub for them, if something gets screwed up it can be a real pain in the ass.
Nowadays my flights are almost all either JetBlue or Southwest. If I go to Houston, I fly United or Continental. Other than that, I try to stick to JB/SW and otherwise stick w/ United out of SFO if I can't get there on those airlines. I'll be adding Virgin America to the mix now, though.
Anyway, definitely write up a letter to the airline. Sounds like your flight should most definitely not have been cancelled and I think you hvae a very good shot at getting your return flight refunded and maybe some additional compensation.
Definitely mention the fact about the FA going illegal - if the flight was delayed in advance, then as you mention THEY ALREADY KNOW AT THAT POINT SHE GOES ILLEGAL, so there's no excuse to wait until midnight to announce that.
OK, locking this thread, feel free to bitch more about airlines in the OOT thread, I feel your pain. So glad I don't travel all the time for business anymore.
ED: Changed my mind, in the time I typed this a couple of good airline horror story posts... So, I'll keep this open for the time being.