I'm guessing that shotgun sequencing techniques are used -- that is, you don't need full length segments in order to reconstruct significantly long lengths of DNA. Again a guess.
No, they're not used, because they didn't find DNA -- they found rocks. We're dealing with fossils here, not organic matter. Tissue does not last for millions of years.
Bakker notes that lots of what people call dinosaur fossils are in actuality just bone. Fossilization is rarely a complete or perfect process. So this may in fact be bone.
