1) you can do both -- client and mesh -- on same channel (just don't recommend it)
2) eth0 should be okay (although I have never bridged anything off an IAP mesh...but not sure why this would be a problem)
3) one creates a mesh by IAP joins the cluster. If a new IAP "sees" the master IAP on the cluster, then they will mesh when one loses its ethernet connection. Any provisioned IAP that has a valid uplink (wired or 3G) functions as a mesh portal, and the IAP without an Ethernet link functions as a mesh point.
When you mesh, you'll have to follow these guidelines.
a) Limited to maximum of two hops from mesh portal (meshed AP->meshed AP->wired AP).
b) Each Portal can have up to a maximum of 8 children (in the mesh).
c) During the setup phase, for an AP to mesh to its Virtual Controller (VC) the AP must see only one instant network. If the mesh point see more than one instant network, it will not form a mesh to either portals
4) I don't see anything wrong with using default VLAN setup.
5) Not sure what this is about. How exactly do you switch to a mesh point? Just unplug it?
Rog