There are several winch designs around. The one I operated most often had a Magirus-Deutz air-cooled V8 Diesel working on a hydraulic clutch to convert rpm to torque as required. This worked rather nicely and in windy weather with a light glider even allowed the cable drums to run backwards (release heights of above 800m have been achieved that way on a 1100m field), although the clutch had a certain tendency to overheat in hot weather. Rapid-fire launches of heavy gliders and insufficient cooling-down periods made it tend to shed all its oil via the melting fuses. Refilling all the IIRC 15 litres (= nearly 4 gallons) of oil and replacing the fuses was not the most popular job and of course the privilege of the unlucky winch driver. An hour or so under the shower usually followed.
Older designs use a petrol V8 engine (often from an Opel Admiral) and may even have a stickshift gearbox in the drivetrain - I have never operated such a device but have heard that stalling the engine is not impossible on those.
I am not familiar with the newest developments in this field; the last time I operated a glider winch is more than 10 years ago already. An electric motor would sound interesting and like a plausible choice though.
The rope disconnect can be everything from a jolt to hardly feelable. A break somewhere mid-tow is usually on the rougher side, but the earlier or later in the tow it gets, the lighter it is; I had a rope break shortly before disconnect that I did not even notice in the glider and learned about only after landing.
The reason for this is the variable power requirement for a launch: the winch will not always pull with the same force. In order to accelerate the glider, firstly the throttle is rather rapidly opened (how far depends on the individual glider type, its mass, weather etc.). When it is airborne for the first 50 meters of height, a fair bit less power is required in order not to overspeed it: the first 50 meters are climbed rather gently as otherwise altitude would be insufficient to lower the nose in case of a break. Then, when the winch operator sees the glider pull up, he is required to increase power again to keep it at speed during the now more rapid climb. The glider will follow an approximate quarter of a circle then, so in the beginning, more power will be required to "lift" the glider, while in the end, the gliders climb rate will decrease and it will tend to overspeed if the power is not appropriately reduced. Finally, the winch driver will cut the power to idle and the pilot will return the elevator to a more neutral position. Both serves to reduce the tension on the cable and allow it to disconnect without a major jolt.
Operating a glider winch is a bit of a black art involving observing the climb rate of the glider, the slackness of the rope, the engine and drive train sound and many other things. If a guy is proficient on one winch, this does not at all mean he can just switch to another winch and operate it with the same expertise in a second.