It just stops all of the audio services but some programs like mplayer use direct access and will work without all the Maemo bloat.

The other questions are all answered on the website. And now the audio question is also answered there.

Power button just unlocks and puts device back in the state it was in before it was locked.

• If the device is locked with a code you can tap the clock (or press home button) to go fullscreen and it will remain in the clock until you manually exit it. Power button will lock or unlock the screen and fullscreen clock will still be active.
• If you enable n800_lock_mode then power button will always open ASUI and you can tap the clock to go fullscreen. Dpad center button will lock the screen and power button will unlock it, and fullscreen clock will still be active.
• Without n800_lock_mode you will have to press the power button once or twice depending on ASUI's state, tap the clock and then dpad center works the same as n800_lock_mode, except that pressing the power while unlocked will cause ASUI and the fullscreen clock to hide.

The escape button always exits fullscreen clock.