Protects against inadvertant update and deletion of select plugins.
No. It only offers you additional protection against deleting or overwriting your customizations. It does allow you to add notes as to why a plugin has been protected.
Yes, as of Version 0.4, Plugin Protector allows for protection in the network admin of a multisite install.
It does display a warning when you are editing a protected plugin, but does not enact any safeguards after having clicked 'Update File'.