This question and answer was post on the forums at www.worldofwarcraft.com.:

We took the questions straight to Kalgan, the designer who created the Honor System. Here are his answers:

Does honor always decay, or only from inactivity?
This is a misunderstanding as to how the honor system works. There is no true “decay” there is only a percentage correction between your current honor rating and your new rating. This is because honor points behave more like a rating system.

Does it always decay at the same rate, or does the player’s rank/duration away affect it?
Again, rank changes as a percentage of the difference between a player’s current honor rating and their current week’s honor rating. However, in order to give players a cushion for “off weeks” the correction is substantially faster when a player is increasing their honor rating than it is going down.

Does it decay to 0, or is there some nominal rank it stops at?
Players would typically have to be inactive in PvP for a very long time (months) before they reach zero.