Looks cute, but a whole lot of trouble for still images. And with the new video tag, Flash is probably more trouble than it's worth also. Besides, I can't see any way users could actually do that - for various security reasons you can't let them post html at all.
A1: AdminCP>Attachments>Attachment Storage Type gives you the path.
A2: Refresh (F5) I guess.
A3: I wonder if a mod that displays inline Flicker, Picasa, Facebook, etc. albums wouldn't be best. Especially what with people always trying to upload beaucoup multi-megapixel snapshots of their pets. Who wants to store that crap?
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