1. Of course. We saw him turn his mother, and a dozen people in S7, under the influence of the First. (I think he turned Sheila in S2, though I admit that's wankable.) I would not be at all surprised if he turned random minions over the years. Given his experience with his mother, I think he'd be very unlikely to turn someone he cared about, lest it go boom.
2. We saw her turn Darla, and if Spike didn't turn Sheila, then Dru probably did. I'm sure she, too, turned various toys and minions over the years.
3. No. (Though granted, there must be lots of vampires who've killed one Slayer.) One of my pet peeves is fic that gives Angelus a higher Slayer-kill total than Spike.
4. In the hood, man! You know! THE HOOD!
5. Buffy's death subbing in for Dawn's is based on the principles of sympathetic magic. Unfortunately, they failed to explain the principles of sympathetic magic on the show. http://www.bartleby.com/196/5.html for an overview.
6. Often. But SO WHAT?!?!?!?!
7. Possibly, but then they'd have to use those yucky blue filters.
8. Since Pylea has two suns, I think it's another planet in another solar system rather than an alternate version of Earth. It might also be in an alternate dimension.