1- I am very happy with it. I use it mostly for Netflix and streaming music. There are a bunch of free channels on their too, some are good, some not so good. All depends what you are into. They are adding new channels all the time too.
2- I would go for the top model. It's not that much more and like someone else mentioned, you will be kicking yourself in a few months for not getting the better model.
3- Yes, you are correct.