X-ray observations of galaxy clusters potentially provide powerful cosmological probes if systematics due to our incomplete knowledge of the intracluster medium (ICM) physics are understood and controlled. In this paper, we present mock Chandra analyses of cosmological cluster simulations and assess X-ray measurements of galaxy cluster properties using a model and procedure essentially identical to that used in real data analysis. We show that reconstruction of three-dimensional ICM density and temperature profiles is excellent for relaxed clusters, but still reasonably accurate for unrelaxed systems. The total ICM mass is measured quite accurately (<6%) in all clusters, while the hydrostatic estimate of the gravitationally bound mass is biased low by about 5%-20% through the virial region, primarily due to additional pressure support provided by subsonic bulk motions in the ICM, ubiquitous in our simulations even in relaxed systems. Gas fraction determinations are therefore biased high; the bias increases toward cluster outskirts and depends sensitively on its dynamical state, but we do not observe significant trends of the bias with cluster mass or redshift. We also find that different average ICM temperatures, such as the X-ray spectroscopic Tspec and gas-mass-weighted Tmg, are related to each other by a constant factor with a relatively small object-to-object scatter and no systematic trend with mass, redshift or the dynamical state of clusters. We briefly discuss direct applications of our results for different cluster-based cosmological tests.