1) Agreed. Only thing that changes is your theme's layout. That's why the instructions mention saving a copy ahead of time as the imported needs to change it to something that it can read.
2) First time this has come up. To be honest I don't know.
3) No, the pictures will not come over. In fact, blogger does not allow hotlinking so you're going to have to move those over manually and relink them. PITA I know.
4) We've had reports of it. I think most of the issue is that Blogger itself doesn't support importing and exporting. The importer is really a work around for the most part. Please note that some folks have reported issues with exporting from Blogger Beta.
Quick aside: Does anyone know if any other blogging packages that do a blogger importer? I can't think of any of the top of my head.
5) Yes. Your posts will be dropped into your default category during tht eimport so you might want to set that if your posts fall into a specific category. Might save you some time down the road.
Hope this helps,