What is the best way to keep a trade secret, well, secret?
You need to make concrete steps towards keeping that secret a secret.
How do I set up an agreement with someone for use of an initial product even though I know I'm going to change it going forward?
This is called a "beta test agreement" and they're very common. In fact, we strongly recommend using them at all possible times to preserve your rights for filing a patent application later (should you choose to).
What are the consequences for messing up a trade secret if it's my company's secret?
It depends on what's in your employment agreement, but it can anything from not a big deal to "you're about to be in trail for months."
Why am I being asked to sign an NDA?
To protect trade secrets and confidential information, one essential element is that the material is actually kept a secret, at least from the general public. An employer (or anyone else) who wants to maintain their trade secret will want you to promise to maintain the confidentiality of their trade secrets. You will see this as part of a nondisclosure agreement or a nondisclosure provision in another agreement, often called an NDA or a confidentiality provision.
What, exactly, are trade secrets?
Trade secrets vary in their definition from state to state, so there is no single definition. But in general, a trade secret can be anything you know that (A) provides a business advantage, (B) is not generally known in the industry, and (C) for which you have taken reasonable steps to keep secret. In most states, the trade secret need not be particularly inventive or novel, so long as it is not generally known in the industry. A famous example is the method for making Coca-Cola. Something cannot be a trade secret when it is impossible to keep secret, such as what the parts of a product that you distribute to the public, since anyone can take the product apart and find out the secret.
Can you license or sell a trade secret?
Yes. But you still must make reasonable efforts to keep it secret, so you will likely have to impose some rules on your licensee that require them to keep your trade secret from being publicly disclosed.