The Transcode Folder is a way of forcing PMS to transcode your videos, basically it saves you fom going back to the pc with PMS on it if you are having a video playback problem and want to transcode it. It gives you some control over PMS via the XMB on your PS3.
Refuse to touch iTunes so don't know, but there is the option to show your iTune library under the Navigation/Share Settings tab.
It can be but I don't know how reliable it is. Apparently you can also install PMS more than once on a PC, obviously to different directories, and, using the IP filter set each up for a specific PS3.
I wish I could remember where but someone created a very good manual somewhere in the forum, some time with the search would probably show it.
As far as Vista is concerned, personally I love it. I am using the 64 bit version too and I have never had any of the problems reported in media, in fact I have found it to be faster and easier to use than XP. For PMS, it has almost always worked for me on install without any tweaking. But life is too short so as long as you have got PMS working to your satisfaction under XP I wouldn't loose any sleep.