If a person owes taxes, but he doesn't pay by the April deadline, does it mean his extension to file until October 17 is invalid and thus be counted as "late filing" or will there be only interest accruing each month and no penalty as long as he files before October 17?

If you have an extension and file by October 17 that is considered being "on time" with the filing, so there is no late filing penalty. However, any taxes owed on your 2010 income tax were due April 1,5 2011, and any payments after April are considered to be late. So for example if you file on October 17 and find that you owe the IRS for your 2010 taxes you will have to pay interest for late payment for the period from April 15 to October 17.