4) As said before where you install is personal preference, I install largish games and things I don't care about on the storage card. It's mainly a matter of if you have 2 SD or 2 CF cards and you need the app on one card and a file on the other of the same type card....
5) Check the WM5 compatability sticky at the top of the Windows Mobile 5 forum for compatability.
http://www.aximsite.com/boards/forumdisplay.php?f=120