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You can recruit their units from that settlement (I believe only up to tier 3) and can have a max of 4 allied units per army.
You can avoid that if you choose your allies carefully. Don't ally with a faction that is likely to get into a war you don't want to be a part of.
Outposts mainly provide two benefits:
1) They add units from your faction to that settlement's garrison, with higher outpost tiers providing stronger defenders. While not directly beneficial for you, it will help keep your allies alive for longer and will be an absolute godsend for Empire's campaign when ME2 comes out.
2) You'll gain the ability to recruit any local recruitable unit from that settlement, with higher tier outposts upgrading the ability to allow you to recruit from that faction's global recruitment pool. This will let you be able to play with units from other races and potentially cover any weak spots in your army(like melee specialist Khorne armies recruiting ranged specialist Tzeentch units and vice versa).
While i do not know for certain. I would assume that you keep any troops already recruited but can't recruit any more.
It isn't random, and if you take the time to see what is going on with diplomacy, most conflicts are quite predictable, mostly in a game where rivalries between races and factions are well established, and represented in diplomacy through modifiers. I make alliances in all my campaigns, mainly because asking the AI to attack a common enemy is more useful than people give it credit, and I'm rarely surprised when one of my allies get into a war.
Not to mention I wouldn't be playing a game called Total War if I wanted peace. Bring it on!