@Josh84
From what I understand, the guest is charged monthly (first month's worth paid upfront). The host is also paid monthly.
I am currently hosting a long term (4 month) guest. A day or two before the 3rd month payment, we recieved a letter from Airbnb that our guest had insufficient funds for payment and that they were going to contact the guest to resolve the payment issue. I recieved a follow-up letter within 24hrs of recieving the first letter that the guest had resolved the problem of insufficient funds and that payment will be processed as usual. (I thought about asking my guest, but decided I will wait 24hrs before asking, to give her time. She took care of it before I had a chance to ask 🙂 ) Other than that one hiccup, I've have had no problems whatsoever with recieving the monthly payments till now.
FYI - My guest checked in on the 21st, and so every 22nd of each month I recieve an e-mail "Payout of 0000000 sent" from Airbnb. I selected bank transfer as my payment method, so the money usually shows up in my account on the 25th or 26th.
Hope this helps~!