1. Only if you have lots of cash to toss away and maybe 4 gig of ram.
2. Only if you really enjoy debugging stuff for free. MS beta test is what other companies call alpha. MS first release is what other companies call beta test.
3. XP Pro and Mozilla Firefox will deal with downloads quite well. And Firefox is more secure than MS IE.
4. In that case anything except maybe windoze laMe Edition would serve quite well. Well, maybe not win 2.x, they never did get that to work.