If you win your first bet, then your entire return (stake plus profit) will be staked on bet two. If you win bet two, then your entire stake plus profits will again be staked when you placed bet three. This is why it's known as a rolling bet.
In-play betting, also known as live betting or run betting, is the process of placing a bet during an event. This could be, for example, during a football match, horse race, golf tournament, or any event that carries a betting market.
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You won't find 1/3 games online but they are quite common in live casinos, usually in place of 1/2 games. The first number represents the amount of the small blind and the second number is the amount of the big blind. As you can see in the comments below - the skill level will vary depending on where you play.
The $1/$2 notation means the small blind must post a forced bet of $1 before each hand, and the big blind must put in $2.