aakk9999 - 7:36 pm on Sep 25, 2012 (gmt 0)

The user will get the language (+cookie) based on his IP location.

This is bad from the usability point of view. If I surf from a different country, the website will offer me a wrong language, and in fact I am wondering if I will be able to change it at all (depending whether the overriding preference is set by cookie or by IP).

With regards to which language will Google detect, if you have language only recorded in cookie and not as a part of URL, Google will only see English. So the website will miss on potential rankings on other languages.

What if I dynamically change hreflang=x and point to the page itself in the header depending on the users location?

If you want to do this because of Google, this will not work - Google will still only see English. The only way for Google to see other languages is to have language parameter in URL (either for all languages or only for non-default language).