1 - Depends on your brand / model.
2 - No
3 - See 1
4 - Many free apps ion the Marketplace.
http://www.rlslog.net/category/applications/android/
Not sure if your phone has to be jailbroken or what procedure to follow
5 - Cheapest and best do not go together.

Best and very popular, but not cheapest: Samsung Galaxy SII.

Previously I had a Galaxy SI, but after a year of use it became slow. Now I have a Iphone 4S 64Gb.