Looks for user-defined phrases in posts and automatically links them to specified URLs. Example: Link every occurrence of "WordPress" to wp.org.
Well, that's obviously up to you. Maybe you don't. But if there is something that you're always linking to, this plugin might help you. For example, I've got a travel blog. I have set it up so that everytime I mention certain cities, the city's name gets linked automatically to a map of that city.
This plugin could also serve SEO (search engine optimization) purposes if you're into that sort of thing; you could use it to ensure plenty of internal cross-linking between your posts.
Yes, as of version 1.03. See the instructions on the plugin's admin page.
Tweak the settings at the top of the plugin file.
Probably not. But this is a simple piece of code, so try modifying it to suit your whims. Take a look at the plugin file. I marked up the code heavily to make it easy to tweak. After looking at the code, if you have a question, you can post a comment on the plugin's page.
If you post your support questions as comments below, I probably won't see them. You can post support questions at the KB Linker plugin page on my site. But first, PLEASE read through the notes at the top of the plugin file.