1. I believe so. Try the disc version first, I say. Not sure how to tell if it's successful.
2. Yes. Get the Alternate Installer
3. It should be.
4. Yes. You need to enable ports (see the sticky) and trade IP addresses with somebody you intend to play with (one of you needs to host, the other connects, you can have up to 8 players, but everybody should have decent connections). Alternatively, you should all be on a LAN together.