I believe others have said the apps are tied to your Gmail account, so when you go to the marketplace they will be in your downloads section ready to download again (so you don't have to buy them again, but you will have to download and install them).
you do not have to buy them again. everything will be able to be reinstalled with no additional charge. sometimes the free apps that you may have downloaded do not show up so i would write down the names in case you need to search for them again.
if you are rooted, you might want to look into titanium backup. great app that will back up your apps and restore them
Nope. Just wipes your phone to the state it was when you got it except it will still have the current firmware that you had before the wipe. The contacts and apps are all connected to your Gmail account
and if you open market up right away your non paid apps will be there. but if u close or reboot just the paid apps will be there. i use back up pro to back it all up. if your rooted then your non paid apps will show up in market. if your not rooted then just your apps will reappear and will have to manually reinstall from market. at least this way you still have a idea what apps you had.
there isn't any improvement from when you initially booted up the phone. it is the same exact thing, especially since there isn't a firmware update out yet since it was released. this is more or less a way to just refresh your phone. it is not somthing you want to do all the time, unless you really want to (though there isn't a reason to)
I highly recommend the use of AppBrain (available in the market). It makes the process of restoring apps a heck of a lot easier, since it restores both paid and free apps, with a few simple clicks of a button.