Regarding your questions,

1. It all depends on the codecs. Although, the avi container is supported, the codec may not actually be supported. When you try to play the video, do you see any error message? check out this link, it will upgrade the codec support http://symbianbriefs.blogspot.com/20...-for-n900.html

2. Firefox is still in beta. Video and audio support is still very slow. Better stick to the default browser.

3. Dunno anything about this. Everything works smoothly for me.

4. You will need to enable the extras-devel repository for that. NOTE: These are apps that are currently under testing, they can be very un-stable.
Also, wait for the un-veiling of maemo app store

5. Which settings are you talking about?