1. Because it's better.
2. Yeah. I might up it a little more for the crazy people, but I don't know.
Ball flight is exactly the same -- that's all done on the server side. The client just displays the models.
3. Standalone supports all of the quake2 stuff, so yes, you can copy old models/textures over. JPEG's and TGA's take priority over .wal and .pcx though, so you have to either delete the jpeg/tga or convert the .wal to a jpeg/tga file and replace it. If you prefer certain textures over the new ones, let me know so I can work to improve the new ones. The whole point of this is to make it better, not worse.
4. Yes, and we do need some better sounds, so if you make better ones give them to me and I can include them in new releases.
You can just copy your maps directory over from quake2/pball, yes.
5. Maplists are just text files. They're easy to make, and with the new version you can even remotely edit maplists while the server is running!