1. At the moment, no. Apps are being ported as fast as they can, so you just have to be patient.
2. It's up to you. The only real plus of going to 2.0 is the AppStore (for iPods at least).
The pwning process does require a stock 2.0.1 firmware to use then adds (from a list of 3 things, so far) of a combination of: A) Installer 4 (beta) B) Cydia C) YouTube Activation Fix.
You'd use all of them, as there's no downside from not using them (except the YouTube fix, if not on then you couldn't use YouTube! And you'd want an installing program, otherwise what's the point?). It does require putting the device in DFU mode.
Here's a guide to Pwning from BigBoss.
Hope all of that helps and answers your questions!