i can only do a quick reply right-now, but FOL can hopefully help with the detail
1 - I think 3.11 should be "easier" to get onto the custom f/w than later versions. I would recommend you go straight to custom f/w and avoid any official upgrades entirely, particularly if this is only a secondary PSP.
2 - Most emulators etc, afaik, are not available signed. As above, i think custom f/w is the way to go if this isnt your only PSP.
3 - totally your choice, but every 8/16 gb cards are not so expensive from sites like amazon etc now.
4 - bare in mind, that with the 1000 model you can, as karol briefly mentioned, make your "own" Pandora battery from the 1000 battery, entirely using software - this can then be converted back .... I'm not sure if you still need another already-hacked PSP to do this (I did with mine, but it was new back then!!) or if you can do do this with PC software etc via the USB. Hopefully FOL can advice here.
Good luck!