1) Hundreds
2) Sometimes I use them for my photos. Often they're (high resolution) scans from microfilms. For example, I currently have a stack of 2325x3307 photos on there. Each photo can be up to a megabyte compressed. My uses are largely academic: if I need to check a transcription, for example, I zoom all the way in. I've also taken them into libraries, and held the n800 with image against XIV-century manuscripts to compare handwriting.
3) Saturation, contrast (Levels would be good too), and rotation are must-haves.
4) Everyone wants both. Keep it simple, at least if you want a product that will make through development.
5) Look, when we need to edit images, most of us are going to use a full computer, but basic editing functionality on a portable device helps.
On the other hand, being able to view images on a portable device is very important. And sometimes we'll be getting them directly from cameras, and the images will have very high pixel counts. We want a viewer that can take any image we throw at it (within reason), and somehow make it work: that not skimping on the memory. The device is small, but our images aren't.
Also, there are going to be many processes that take a lot of time. If there's a way to monitor input (so that if I press a wrong button, I can back out, rather than waiting for the process to complete, then spending as much time undoing the process) during those processes, please do so. It's worth the extra cycles.

So, I want something with two modes:
A. Menu mode: across the top of the screen is a series of menus that allows us to do the usual image organizing actions, as well as viewing actions.
B. Full screen mode: here the focus needs to be on viewing images. Ideal for me would be:
Rocker switch: center button -- return to menu mode, + = zoom in, - = zoom out.
D Pad: Left = previous image in directory, Right = next image in directory. Up = Rotate image 90 degrees right, Down = rotate image 90 degrees left.
Cancel button: return to fit-to-screen zoom (default) (but don't change rotation)
Menu button: brings up the "menu mode" menu as a list.
Dragging on the screen: pan image (if you can throw a little inertia in there too, cool).

Anyway, that's ideal for me.

6. I abuse my electronic toys. I've taken over 20k photos on my aging digital camera. I have scan thousands of microfilmed pages. I have a computer at home that I use to manipulate the images, and place them on the n800 when I need something portable. I also use the n800 to login to our online repository and view the images we store there.