If I could use the search, there was a previous thread on buying for cash. If you are prepared to browse or use the Google search facility (as detailed in Brendan's announcement), you may be able to find it.
In relation to the timing belt and the service, I'm sure they may penalise you if you tell them/have to tell them (in relation to the timing belt anyway), but I think would have to service the car anyway.
cash discounts really only apply when you are not trading in a car against a new car. The reason why the garage will offer you a cash price is because you are not leaving a car there for them to service, valet and then try to sell which costs them a fair bit. So they can give you what looks like a nice price on the new car.
It can sometimes work out much better to sell your car privately and then use the cash to go and haggle with the garage for your new car.
If you are trading in your car they will give you a quote on what its worth to them, not the market value on it. They will obviously service it and it will be much cheaper for them to service it instead of you doing it before hand. Chances are even if you service it yourself they wont give you a better price as they'll end up doing it again for any warranty to be legal.
try to avoid buying extras such as alloy wheels, sound systems, alarms, body styling bits and so on from main dealers as they will always be more expensive through them compared to your local motor factor or car accessory shop.
Most garages would penalise you about 1,000 Euro if they cop you need a timing belt, you might get lucky. That being said bigger garages will not retail a car over 3 years old or with 50k + miles, unless its a 'bit of flash'. Hence it will go out to the trade and wont make much difference to the price. If you are going to get this work done yourself then you will need to sell private, it's probably a lot of hastle. Shop about and try to get garages in a dutch auction situation.
I "conducted" a dutch auction between few dealers, with decreasing bids and the last one to stand up got my deal.
Got 8.05% discount at the end.... Happy enough.